Problem
On June 1, 2023, Jill Bow and Aisha Adams formed a partnership to open a gluten-free commercial bakery, contributing $295,000 cash and $390,000 of equipment, respectively. The partnership also assumed responsibility for a $55,000 note payable associated with the equipment. The partners agreed to share profits as follows: Bow is to receive an annual salary allowance of $165,000, both are to receive an annual interest allowance of 8% of their original capital investments, and any remaining profit or loss is to be shared 40/60 (to Bow and Adams, respectively). On November 20, 2023, Adams withdrew cash of $115,000. At year-end, May 31, 2024, the Income Summary account had a credit balance of $530,000. On June 1, 2024, Peter Williams invested $135,000 and was admitted to the partnership for a 20% interest in equity.
Record the closing of profit to capital.