PR 12-1A Entries and balance sheet for partnership OBJ. 2 On March 1, 20Y8, Eric Keene and Renee Wallace form a partnership. Keene agrees to invest $23,400 in cash and merchandise inventory valued at $62,600. Wallace invests cer- tain business assets at valuations agreed upon, transfers business liabilities, and contrib- utes sufficient cash to bring her total capital to $60,000. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow: Wallace's Ledger Agreed-Upon Balance Valuation Accounts Receivable $19,900 $19,500 Allowance for Doubtful Accounts 1,200 1,400 Equipment 83,500) 55,400 Accumulated Depreciation Equipment 29,800 Accounts Payable 15,000 15,000 Notes Payable (current) 37,500 37,500 The partnership agreement includes the following provisions regarding the division of net income: interest on original investments at 10%, salary allowances of $19,000 (Keene) and $24,000 (Wallace), and the remainder equally. Instructions 1. Journalize the entries to record the investments of Keene and Wallace in the partner- ship accounts. 2. Prepare a balance sheet as of March 1, 20Y8, the date of formation of the partnership of Keene and Wallace. 3. After adjustments at February 28, 2099, the end of the first full year of operations, the revenues were $300,000 and expenses were $230,000, for a net income of $70,000. The drawing accounts have debit balances of $19,000 (Keene) and $24,000 (Wallace). Journalize the entries to close the revenues and expenses and the drawing accounts at February 28, 2019. a. Mar. 1 1 2. KEENE AND WALLACE Balance Sheet March 1, 20Y8 Assets Current assets: Cash Accounts receivable Less allowance for doubtful accounts Merchandise inventory Total current assets Property, plant, and equipment: Equipment Total assets Liabilities Current liabilities: Accounts payable Notes payable Total liabilities Partners' Equity Eric Keene, capital Renee Wallace, capital Total partners' equity Total liabilities and partners' equity 3. Feb. 28 28 Keene Wallace Total Schedule: Interest allowance Salary allowance Remaining income Net income