On January 1, 2016, Smith, Brown and Green formed a partnership. The following capital contributions were made:

Smith $40,000

Brown $50,000

Green $30,000

The partnership agreement stated that profit will be allocated equally.

For its fiscal year ended December 31, 2016, the partnership had a profit of $22,500.

On January 1, 2017, the partners agreed to accept White as a new partner. They required White to pay $75,000 cash in return for a 25% ownership. For the year ended December 31, 2017, the partnership had a profit of $50,000 which is to be allocated equally.

On January 1, 2018, Brown retired. Brown was paid $100,000 in partnership cash for his equity.

Required: 1) Prepare the journal entry to allocate the 2016 profit to each partner.

2) Prepare the journal entry to record the investment by White.

3) Allocate the 2017 profit to each partner.

4) Prepare the journal entry to record the withdrawal of Brown from the partnership.