Kathleen Reilly and Ann Wolf Decide to Form a Partnership

Kathleen Reilly and Ann Wolf decide to form a partnership on August 1. Reilly invested the following assets and liabilities in the new partnership: The note payable is associated with the building and the partnership will assume responsibility for the loan. Wolf invested $60,000 in cash and $105,000 in equipment in the new partnership. Prepare the journal entries to record the two partners' original investments in the new partnership.

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