Kimberly payne and arionna maples decide to form a partnership by combining the assets of their separate businesses. payne contributes the following assets to the partnership: cash, $20,000; accounts receivable with a face amount of $145,000 and an allowance for doubtful accounts of $4,200; merchandise inventory with a cost of $92,000; and equipment with a cost of $136,000 and accumulated depreciation of $45,000.
the partners agree that $5,000 of the accounts receivable are completely worthless and are not to be accepted by the partnership, that $4,400 is a reasonable allowance for the uncollectibility of the remaining accounts, that the merchandise inventory is to be recorded at the current market price of $101,700, and that the equipment is to be valued at $81,200.on december 1, journalize the partnership's entry to record payne's investment.

The journal entry is given below:

Explanation:

Date                      Description                                      Debit ($)      Credit ($)

Dec 1         Cash                                                              20,000

                 Accounts Receivable $(145000-5000)(1)  140,000

                 Merchandise Inventory*                              101,700

                 Equipment**                                                   81,200

                            Allowance for doubtful accounts                               4,400

                            Payne, Capital                                                         338,500

Note: 1) Since $5,000 of accounts receivables are irrecoverable, therefore, it is an expense, which decreases the accounts receivables amount.

* Merchandise inventory to be valued at a current year's ending price

** For partnership journal purpose, equipment is to be valued at net book value price rather than cost price.

Therefore, Payment's investment is $338,500.

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