Prepare separate journal entries to record the transfer of

Question

The post-closing trial balances of two proprietorships on January 1, 2010, are presented below.

John and Calvin decide to form a partnership, John-Calvin Company, with the following agreed upon valuations for noncash assets.

All cash will be transferred to the partnership, and the partnership will assume all the liabilities of the two proprietorships. Further, it is agreed that John will invest an additional $3,500 in cash, and Calvin will invest an additional $16,000 in cash.

Instructions

(a) Prepare separate journal entries to record the transfer of each proprietorship's assets and liabilities to the partnership.

(b) Journalize the additional cash investment by each partner.

(c) Prepare a classified balance sheet for the partnership on January 1,2010.