Using each company records and going through a thorough transactional analysis, you are now recording all of the transactions that should have been previously recorded, when they originally occurred.

Please Prepare a Journal entry for the following:

1.Joseph Moss and Michael Barber organized their Law firm as a partnership on January 1, 2019. Mr. Moss's initial net investment is $ 110,000, consisting of cash ($30,000 ), equipment ($90,000) , and a payable reflecting a bank loan for the new business ( $10,000). Mr. Barber's initial investment is cash only ($ 40,000).

2.During its first year of operation ( 1-1-19 to 12-31-19 ), the partnership earned $ 160,000. The partners agreed to share income by giving a $50,000 per year salary allowance to Mr. Moss, a 40,000 per year salary allowance to Mr. Barber , 10% interest on their initial capital investments , and the remaining balance shared equally.

3.On January 1, 2020 the Partners agreed to admit a new Partner , Sara Dasani who will contribute assets to the Firm in the form of a Building . The Building has a market value of $ 80,000 Ms. Dasani is to receive a 15% interest in the new Partnership . The Partnership Agreement states that " Any attributed Bonuses for new Partner Admissions will be split equally.

4.Throughout 2020, the Firm operated at breakeven, with no profit or loss. Due to several disagreements among the Partners, on 12/31/2020, the Firm decided to dissolve. Based on your analysis to date, you prepare a 12/31 / 2020 Trial Balance. The Partnership ceases active operations effective 1-1-2021 and begins the liquidation process. On 1-15-21 the Equipment is sold for 40,000 . On 1-25-21 the Building is sold for 90,000. No Depreciation was ever taken on either asset and now this will be incorporated into any Gain or Loss generated by the disposal of the assets, rather than recording backdated depreciation . As per that Partnership Agreement , all Gains and Losses on Assets disposals are shared equally On 1-28 21, the Firm pays off all of its outstanding obligations . On 1-31-21 , the Firm makes final distributions to the Partners.