Accounting for the liquidation of a partnership
The Kelly & Lena partnership has the following balances on June 30, 2012:
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KELLY & LENA Balance Sheet June 30, 2012
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Assets
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Liabilities and Owners' equity
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Cash
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$ 5,000
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Accounts payable
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$20,000
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Other assets
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30,000
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Kelly, capital
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8,000
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Lena, capital
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7,000
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Total assets
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$35,000
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Total liabilities and owners' equity
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$35,000
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Kelly and Lena share profits 2:3.
Requirement
1. Journalize the sale of the noncash assets for $25,000, the payment of the liabilities, and the payment to the partners.