The partnership of Addie and Bal is adding a new partner, Cathy, and its assets and equities at book value and fair value just prior to her admission to the partnership on January 1, 2011, are as...

The partnership of Addie and Bal is adding a new partner, Cathy, and its assets and equities at book value and fair value just prior to her admission to the partnership on January 1, 2011, are as follows:





On January 2, 2011, Addie and Bal take Cathy into the partnership of Addie, Bal, and Cathy for a 40 percent interest in capital and profits.
REQUIRED
1. Prepare journal entries for the admission of Cathy into the partnership for an investment of $150,000 assuming that assets (including any goodwill) are revalued.
2. Prepare a balance sheet for the Addie, Bal, and Cathy partnership on January 2, 2011, just after the admission of Cathy.