When Alice and Betty decided to incorporate their partnership, its trial balance was as follows:

Debit Credit

Cash $ 8,100

Accounts Receivable (net) 24,300

Inventory 36,300

Equipment (net) 47,800

Accounts Payable $ 17,600

Alice, Capital (60%) 64,400

Betty, Capital (40%) 34,500

Total $ 116,500 $ 116,500

The partnerships books will be closed, and new books will be used for A & B Corporation. The following additional information is available:

The estimated fair values of the assets follow:

Accounts Receivable $ 23,500

Inventory 33,100

Equipment 40,600

All assets and liabilities are transferred to the corporation.

The common stock is $10 par. Alice and Betty receive a total of 7,400 shares.

The partners profit and losssharing ratio is shown in the trial balance.

Required:

Prepare the entries on the partnerships books to record (1) the revaluation of assets, (2) the transfer of the assets to A & B Corporation and the receipt of the common stock, and (3) the closing of the books.

Prepare the entries on A & B Corporations books to record the assets and the issuance of the common stock.