Kathleen Reilly and Ann Wolf Decide to Form a Partnership

Essay

Kathleen Reilly and Ann Wolf decide to form a partnership on August 1.Reilly invested the following assets and liabilities in the new partnership:
$$\begin{array} { |l |c |c| } \hline & \text { Cost/Baak Value } & \text { Market Value } \\\hline \text { Land } & \$ 75,000 & \$ 100,000 \\\hline \text { Building } & \$ 250,000 & \$ 300,000 \\\hline \text { Note Payable } & \$ 198,000 & \$ 198,000\\\hline \end{array}$$
The note payable is associated with the building and the partnership will assume the responsibility for the loan.Wolf invested $60,000 in cash and $105,000 in new equipment in the new partnership.Prepare the journal entries to record the two partner's original investments in the new partnership.