On March 1, 2015, Eckert and Kelley formed a partnership. Eckert contributed $82, 500 cash and Kelley contributed land valued at $60,000 and a building valued at $100,000. The partnership also assumed responsibility for Kelley’s $92, 500 long-term note payable associated with the land and building. The partners agreed to share income as follows. Eckert is to receive an annual salary allowance of $25,000, both are to receive an annual interest allowance of 10% of their beginning-year capital investment, and any remaining income or loss is to be shared equally. On October 20, 2015. Eckert withdraw $34,000 cash and Kelley withdrew $20,000 cash. After the adjusting and closing entries are made to the revenue and expense accounts at December 31, 2015, the income Summary account had a credit balance of $90,000. Prepare journal entries to record the partners’ initial investments and their subsequent cash withdrawals.
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