Partner investments; journal entries.
The LP partnership was formed on January 1, 19X7, by investments from Bill Levy and Marv Parcells. Levy contributed $30,000 cash and $80,000 of land. Parcells contributed various assets from a business that he had operated over the past five years. A balance sheet from that business disclosed the following:
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Accounts receivable
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27,000
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Allowance for uncollectibles
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(3,200)
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Equipment
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68,000
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Accumulated depreciation
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(24,000)
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The partners confirmed that the allowance for uncollectible accounts should be decreased by $600. In addition, an independent appraisal determined that fair market values of the land and equipment on January 1 were $125,000 and $35,000, respectively.
Prepare the journal entries needed to record the investments of Levy and Parcells.