VII. Esel and Yan are partners in an 80% & 20% ratio, organized the Eyan Corporation. The new corporation is authorized to issue 20 000 shares of P 20 par value stock, of which 11 000 shares are issued at P 30 a share to the partners in accordance with their adjusted capital accounts. Eyan Corporation also issued 2 000 for cash to other incorporators at P 30 a share. Presented below is the balance sheet of the partnership on Aug. 31, 2018 just prior to incorporation. Esel & Yan Balance Sheet Aug. 31, 2018 Assets: P 80 000 Cash P 48 000 Liabilities: Notes Payable Accounts Payable 60 000 Accounts Rcble. P 112 400 Less: 2 400 110 000 Total Inventories 102 000 240 000 Equipment Less: Accu. Depr. 104 000 136 000 Capital: Esel, capital: P 191 969 Yan, capital: 64 040 256 000 396 000 Total Assets P 396 000 The partners agree to make the following adjustments before the incorporation 1. Allowance for bad debts should be increased to P 4 000. 2. The current market value of the inventories should be used 120 000. 3. Increase the historical cost of the equipment to its reproduction cost (new) of P 280 000 and the accumulated depreciation to be increased To P 122 000. 4. Accrued expenses of P 4 400 is to be recognized. 5. Recognize goodwill of 40 000. Required: 1. Journal entries in incorporating the partnership if: Partnership books will be retained 2. Balance sheet of the corporation. VII. Esel and Yan are partners in an 80% & 20% ratio, organized the Eyan Corporation. The new corporation is authorized to issue 20 000 shares of P 20 par value stock, of which 11 000 shares are issued at P 30 a share to the partners in accordance with their adjusted capital accounts. Eyan Corporation also issued 2 000 for cash to other incorporators at P 30 a share. Presented below is the balance sheet of the partnership on Aug. 31, 2018 just prior to incorporation. Esel & Yan Balance Sheet Aug. 31, 2018 Assets: P 80 000 Cash P 48 000 Liabilities: Notes Payable Accounts Payable 60 000 Accounts Rcble. P 112 400 Less: 2 400 110 000 Total Inventories 102 000 240 000 Equipment Less: Accu. Depr. 104 000 136 000 Capital: Esel, capital: P 191 969 Yan, capital: 64 040 256 000 396 000 Total Assets P 396 000 The partners agree to make the following adjustments before the incorporation 1. Allowance for bad debts should be increased to P 4 000. 2. The current market value of the inventories should be used 120 000. 3. Increase the historical cost of the equipment to its reproduction cost (new) of P 280 000 and the accumulated depreciation to be increased To P 122 000. 4. Accrued expenses of P 4 400 is to be recognized. 5. Recognize goodwill of 40 000. Required: 1. Journal entries in incorporating the partnership if: Partnership books will be retained 2. Balance sheet of the corporation