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Sarah and Tim formed a partnership by combining their sole trader businesses, contributing the following to the new partnership (all figures in thousands). Sarah contributed cash of $54 and land with a fair value of $390 that had cost $108. The partnership also assumed Sarah’s business overdraft of $144. Tim contributed cash of $120 and equipment that cost $146, and had accumulated depreciation of $70 and a fair value of $84. The partnership also assumed Tim’s accounts receivable of $22 and the provision of bad debts (which upon review is believed to be inadequate) of $2. Prepare the journal entries to record the investment by both partners.
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