Response to the following problem:
Killibrew, Santos, and Terry were partners in KST Sports. Under the partnership agreement, each partner receives an interest allowance of 9 per cent of her opening capital balance and a salary allowance as follows: Killibrew - $20,000; Santos - $18,000; and Terry - $10,000. Terry, who manages the stores in the off season, receives a bonus of 20 per cent of the income in excess of $18,000 after partners' interest and salary allowances. The balance of net income or net loss is divided equally. The capital balances at the beginning of the year were: Killibrew - $120,000, Santos - $110,000, and Terry - $170,000.
Required:
1. Prepare the journal entry to divide net income of $144,000.
2. Prepare the journal entry to divide net loss of $6,000