The adjusting entry to record the adjustments of assets and liabilities of Matteo : * (1 Point) On April 1, 2019, Sarah and Matteo pooled their resources to form a partnership with the firm taking over the assets and assuming the partnership liabilities. On this date their individual trial balances show the following: Cash Inventory Accounts payable Notes payable Capital Sarah P 25,000 150,000 60,000 115,000 Matteo P 30,000 220,000 45,000 100,000 105,000 The partners agreed that capital and profit & loss ratio of 6:4, respectively and that additional investment is to be made to raise the total capital to P 250,000. Inventory should be adjusted to their fair market values of: Sarah, P 120,000 and Matteo, P 190,000. Unrecorded liabilities in the books of Sarah amounting to P 5,000 while accrued interest on notes payable of Matteo in the amount of P 5,000 is to be recognized. Prepaid rent in the books of Matteo amounting to P 6,000 is to be recorded. Debit Mateo, Capital - 29,000 & Prepaid rent- 6,000; Credit Inventory - 30,000 & Interest payable- 5,000 Debit Inventory-190,000; Credit Interest payable- 5,000 & Mateo, Capital - 185,000 Debit Mateo, Capital - 35,000; Credit Inventory - 30,000 & Interest payable- 5,000 Debit Inventory- 190,000 & Prepaid rent - 5,000; Credit Interest payable- 5,000 & Mateo, Capital - 190,000