Mo Mulder and Molly Munchkin operate separate hobby shops. On April 8, 2021, they decide to combine their businesses, which had been operated as proprietorships, to form Mo & Molly Partnership. Information from their separate balance sheets is presented below:

		Mo's Models		Molly's Crafts
Cash		$10,000		$4,000
Accounts receivable		2,000		1,150
Allowance for doubtful accounts		250		100
Accounts payable		1,250		500
Equipment		2,300		900
Accumulated depreciation - equipment		900		500

It is agreed that the expected realizable value of Mos accounts receivable is $1,350 and Molly's receivables is $950. The fair market value of Mos equipment is $1,100 and Molly's equipment is $600. It is further agreed that the new partnership will assume all liabilities of the proprietorships.

Prepare the journal entries necessary to record the formation of the partnership. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Apr. 8, 2021	Accounts ReceivableCashAccounts PayableM. Munchkin, CapitalAllowance for Doubtful AccountsM. Mulder, CapitalEquipment
	Accounts PayableAccounts ReceivableM. Mulder, CapitalM. Munchkin, CapitalAllowance for Doubtful AccountsEquipmentCash
	CashM. Munchkin, CapitalAccounts ReceivableAccounts PayableAllowance for Doubtful AccountsM. Mulder, CapitalEquipment
	CashM. Munchkin, CapitalAllowance for Doubtful AccountsAccounts PayableEquipmentM. Mulder, CapitalAccounts Receivable
	CashAllowance for Doubtful AccountsM. Mulder, CapitalAccounts PayableEquipmentAccounts ReceivableM. Munchkin, Capital
	M. Munchkin, CapitalAccounts ReceivableM. Mulder, CapitalCashEquipmentAccounts PayableAllowance for Doubtful Accounts
	(To record Mo's Models)
Apr. 8, 2021	Accounts PayableAccounts ReceivableEquipmentAllowance for Doubtful AccountsM. Munchkin, CapitalCashM. Mulder, Capital
	Accounts PayableM. Mulder, CapitalM. Munchkin, CapitalAccounts ReceivableEquipmentAllowance for Doubtful AccountsCash
	M. Mulder, CapitalAccounts PayableM. Munchkin, CapitalCashAccounts ReceivableAllowance for Doubtful AccountsEquipment
	Allowance for Doubtful AccountsM. Mulder, CapitalEquipmentAccounts PayableM. Munchkin, CapitalAccounts ReceivableCash
	M. Mulder, CapitalAccounts PayableEquipmentAccounts ReceivableM. Munchkin, CapitalCashAllowance for Doubtful Accounts
	M. Mulder, CapitalAllowance for Doubtful AccountsEquipmentAccounts ReceivableAccounts PayableCashM. Munchkin, Capital
	(To record Molly's Crafts)

Determine the partnerships balances in each account immediately after forming the partnership.

		Balances
Cash		$		Debit balanceCredit balance
Accounts receivable		$		Debit balanceCredit balance
Allowance for doubtful accounts		$		Credit balanceDebit balance
Equipment		$		Credit balanceDebit balance
Accounts payable		$		Credit balanceDebit balance
M. Mulder, Capital		$		Credit balanceDebit balance
M. Munchkin, Capital		$		Debit balanceCredit balance