Steffi and Leigh form a partnership. Steffi invests $1,000 cash, $2,000 of supplies, inventory with a mar- ket value of $3,000, and machinery with a market value of $4,000. Prepare the partnership's journal entry to record Steffi's investment. Exercise 12-4 Recording partnership formation P1

Formation of partnership Assume that two individuals agree to form a partnership. Partner A is contributing an operating business that reports the following balance sheet: Cash $5,000 Accounts payable $15,000 Receivables 10,000 Accrued liabilities Inventories 20,000 Total liabilities 10,000 $25,000 Total assets $35,000 Net assets $10,000 Partner B is contributing cash of $25,000. The partners agree that the initial capital of the partnership should be shared equally. Prepare the journal entry to record the capital contributions of the partners using both the Bonus Method and the Goodwill Method.