The capital accounts of Susan Yu and Ben Hardy have balances of $100,000 and $90,000 respectively. Ken Mahl and Jeff Wood are to be admitted to the partnership. Mahl buys one-fourth of Yu’s interest for $27,500 and one-fifth of Hardy’s interest for $20,000. Wood contributes $35,000 cash to the partnership, for which he is to receive an ownership equity of $35,000.

a. Journalize the entries to record the admission of

(1) Mahl

(2) Wood.

b. What are the capital balances of each partner after the admission of the new partners?