On January 1, 2020, Sprock joins the partnership. Sprock purchased a 30% interest in the partnership by contributing cash of $125,000 to the partnership. The partnership uses the bonus method to record this transaction.

The articles of partnership were amended to reflect the following:

• Monthly withdrawals of $2,000 are allowed for each partner.
• Net income is to be allocated as follows:
  • OConnor receives a compensation allowance of $1,000 per month for administrative duties and Sprock receives a compensation allowance of $2,000 to attract new business.
  • Interest of 10% is to be allocated on the basis of beginning of year capital balances (ending balance from prior year).
  • Remainder of profit or loss shared in the following ratios:
    • Dutcher 25%
    • OConnor 25%
    • Gilchrist 20%
    • Sprock 30%

Net partnership income for 2020 was $200,000. All partners took the allowed withdrawals of $2,000 per month.

For each year prepare journal entries as necessary to record formation of the partnership, admission of new partners, withdrawal of existing partners, closing of the income summary and withdrawal accounts. Also prepare a schedule of allocation of net income and a statement of partners capital for each year.