PROBLEM 1 Eli is to retire from the partnership of E and Associates as of Dec. 31, 2019. After closing the books, the capital balances of the partners are as follows: Eli P640,000; Elijah P480.000; and Elisha P400,000. They have shared net income and losses in the ratio of 2:1:1. The partners agree that the merchandise inventory be increased by P56,000 and allowance for bad debts be reduced by P8,000. Eli agrees to accept and interest bearing note for P400,000 in partial settlement of his ownership equity. The remainder of his claim is to be paid in cash. Elijah and Elisha are to share equally in profits and losses of the new partnership. Required: Prepare the entries in general journal form to record: 1. The adjustments of the assets to bring them into agreement with current fair prices. 2. The withdrawal of Eli