Sheena Kennet and Patricia Waters are forming a partnership to develop a theme park near Carlson City, Florida. Kennet contributes cash of $1,500,000 and land with a current market value of $9,500,000. When Kennet purchased the land in 2013, its cost was $5,500,000. The partnership will assume Kennet’s $2,750,000 note payable on the land. Waters contributes cash of $3,500,000 and equipment with a current market value of $6,000,000.
1. Journalize the partnership’s receipt of assets and liabilities from Kennet and from Waters.
2. Compute the partnership’s total assets, total liabilities, and total partners’ equity immediately after organizing.