The Kumjian-Pask algebra of a higher-rank graph generalises the Leavitt path algebra of a directed graph. We extend the definition of Kumjian-Pask algebra to row-finite higher-rank graphs Λ with sources which satisfy a local-convexity condition. After proving versions of the graded-uniqueness theorem and the Cuntz-Krieger uniqueness theorem, we study the Kumjian-Pask algebra of rank-2 Bratteli diagrams by studying certain finite subgraphs which are locally convex. We show that the desourcification procedure of Farthing and Webster yields a row-finite higher-rank graphΛ without sources such that the Kumjian-Pask algebras ofΛ and Λ are Morita equivalent. We then use the Morita equivalence to study the ideal structure of the Kumjian-Pask algebra of Λ by pulling the appropriate results across the equivalence.Since (KP4 ′ ) is the same as the fourth Cuntz-Krieger relation of [20, Definition 3.3], we get the following. Lemma 3.2 ([20, Proposition 3.11]). Let Λ be a locally convex, row-finite k-graph. Then (KP4 ′ ) holds at v ∈ Λ 0 if and only if, for 1The next lemma gives a version of (3.1).Proposition 3.3. Let Λ be a locally convex, row-finite k-graph, (P, S) a Kumjian-Pask Λ-family in an R-algebra A, and λ, µ ∈ Λ. If n ∈ N k such that d(λ), d(µ) ≤ n, thenλα) * S µβ S β * by (KP2) = α∈s(λ)Λ ≤n−d(λ) β∈s(µ)Λ ≤n−d(µ) ,λα=µβ S α P s(µβ) S β * by applying (KP3 ′ ) to each summand. By unique factorisation, for each α there is just one β of the given degree such that λα = µβ, and the sums collapse to = α∈s(λ)Λ ≤n−d(λ) ,λα=µβ S α S β * This proves the lemma after noting that the purely graph-theoretic result [20, Lemma 3.6] says that composing λ with α ∈ s(λ)Λ ≤n−d(λ) gives the path λα ∈ Λ ≤n . Corollary 3.4. Let Λ be a locally convex, row-finite k-graph and (P, S) a Kumjian-Pask Λ-family in an R-algebra A. The subalgebra generated by (P, S) is span{S α S β * : α, β ∈ Λ, s(α) = s(β)}. Proof. We have S α S β * = S α P s(α) P s(β) S β * by (KP2), so S α S β * = 0 unless s(α) = s(β) by (KP1). The result now follows from Proposition 3.3 and (KP2). The set of minimal common extensions of λ, µ ∈ Λ is Λ min (λ, µ) := {(α, β) : λα = µβ, d(λα) = d(λ) ∨ d(µ)}.