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Assume that two individuals agree to form a partnership. Partner A is contributing an operating business that reports the following balance sheet:
| Cash | .$120,000 | | Accounts payable. | $160,000 |
| Receivables | 160,000 | | Accrued liabilities | 120,000 |
| Inventories | 200,000 | | Total liabilities | $280,000 |
| Total assets | $480,000 | | Net assets | $200,000 |
Partner B is contributing cash of $280,000. The partners agree that the initial capital of the partnership should be shared equally.
Required: Prepare the journal entry to record the capital contributions of the partners assuming that the partners wish to employ the Bonus Method.
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