Michelle Hamilton and Bill Rossi decide to form a partnership. Hamilton invests $35000 cash and accounts receivable of $30000 less allowance for doubtful accounts of $2000. Rossi contributes $25000 cash and equipment having a $6000 book value. It is agreed that the allowance account should be $3000 and the fair value of the equipment is $10000.
Instructions
Prepare the necessary journal entry to record the formation of the partnership.

Question

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The Answer of Michelle Hamilton and Bill Rossi decide to form a partnership. Hamilton invests $35000 cash and accounts receivable of $30000 less allowance for doubtful accounts of $2000. Rossi contributes $25000 cash and equipment having a $6000 book value. It is agreed that the allowance account should be $3000 and the fair value of the equipment is $10000.
Instructions
Prepare the necessary journal entry to record the formation of the partnership.

Michelle Hamilton and Bill Rossi Decide to Form a Partnership