On February 1, 2020, Tessa Williams and Audrey Xie formed a partnership in Ontario. Williams contributed $98,000 cash and Xie contributed land valued at $138,000 and a small building valued at $198,000. Also, the partnership assumed responsibility for Xies $148,000 long-term note payable associated with the land and building. The partners agreed to share profit or loss as follows: Williams is to receive an annual salary allowance of $108,000, both are to receive an annual interest allowance of 12% of their original capital investments, and any remaining profit or loss is to be shared equally. On November 20, 2020, Williams withdrew cash of $78,000 and Xie withdrew $63,000. After the adjusting entries and the closing entries to the revenue and expense accounts, the Income Summary account had a credit balance of $178,000. Required: 1. Present general journal entries to record the initial capital investments of the partners, their cash withdrawals, and the December 31 closing of the Income Summary and withdrawals accounts.

• 1. Record the initial capital investments.
• 2. Record the partners withdrawals.
• 3. Record the allocation of profit and close the Income summary account.
• 4. Record the entry to close withdrawals accounts.

2. Determine the balances of the partners' capital accounts as of the end of 2020. Williams Xie Capital account balances