I need the journal entries. P17-9 Installment liquidation--Safe payments schedul

Question

I need the journal entries. P17-9 Installment liquidation--Safe payments schedules The balance sheet of Ron, Sue, and Tom, who share partnership profits 30 percent, 30 percent, and 40 percent, respectively, included the following balances on January 1, 2011, the date of dissolution: Cash Other assets Loan to Sue $20,000 130,000 10,000 Liabilities Loan from Ron Ron capital Sue capital Tom capital $40,100 5,000 9,900 45,000 60,000 $160.000 160,000 During January 2011, parts of the firm's assets are sold for $40,000. In February the remain- ing assets are sold for $21,000. Assume that available cash is distributed to the proper parties at the end of January and at the end of February REQUIRED: Prepare a statement of partnership liquidation with supporting safe payments schedules for ach cash distribution. (It will not be possible to determine the actual gains and losses in January.)

Explanation / Answer

Case given above is liquidation of Partnership Firm. It involves sale of all assets, payment to all liabilities and closing of all books of accounts.
The journal entries required are as below -

Alternatively, if Ron is not insolvent.. then above journal entry will be as follows-

Date Particulars Debit Credit Jan-11 Cash $ 40,000.00 Assets $ 40,000.00 (Being Assets sold) (It is stated in question that its not possible to determine actual gain or loss in sale. So, the loss/gain recognition and its adjustments with the capital accounts not done in january) Liabilities $ 40,100.00 Cash $ 40,100.00 (Being cash paid to all creditors) Sue Capital $ 10,000.00 Loan to Sue $ 10,000.00 (Being loand to sue is adjusted with Sue capital Account) Available cash (20,000 + 40,000 - 40,100) = 19,900 Balance in Sue Capital (45,000 - 10,000) = 35,000 Ron Capital $    1,878.00 Sue Capital $    6,640.00 Tom Capital $ 11,382.00 Cash $ 19,900.00 (Being balance in cash at end of january is distributed among partners' in capital ratio) Feb-11 Cash $ 21,000.00 Loss on sale $ 69,000.00 Assets $ 90,000.00 (being remaining assets sold) The total loss on sale of asset is recognised Ron Capital $ 20,700.00 Sue Capital $ 20,700.00 Tom Capital $ 27,600.00 Loss on sale $ 69,000.00 (being loss on sale is transferred to capital account in income ratio) Balance in Capital Account - Ron (9900 - 1878 - 20700) = 12678 (dr) Sue (35000 - 6640 - 20700) = 7660 (cr) Tom (60000 - 11382 - 27600) = 21018 (cr) Loan from Ron $    5,000.00 Ron Capital $    5,000.00 (being loan from ron is adjusted with ron capital (deficit) account balance in Ron Capital = 12678(dr) - 5000 = 7678(dr) Sue Capital $    7,660.00 Tom Capital $ 21,018.00 Cash $ 21,000.00 Ron Capital $    7,678.00 (being cash paid to sue and tom and deficit adjusted in capital ratio assuming Ron insolvent)

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