Assume the following information just prior to the admission of new partner I: Assets Cash Accounts receivable $ 5,000 43,000 Partner -HJ Liabilities Accounts payable G, Capital H, Capital Ownership interest 20% 5% 75% 100% Partners' Capital $30,000 $48,000 Required: Prepare journal entries to record the following unrelated scenarios: 5. New partner I purchases partners G's partnership interest for $40,000. 6. New partner I receives a cash bonus of $2,000 and a one-tenth ownership share, allocated equally from the partnership interests of G and H. 7. New partner I contributes land with a fair value of $100,000. Relative ownership interests after this transaction are: $ 8,000 10,000 40,000 $48,000

Assume the following information just prior to the admission of new partner I: Assets Cash Accounts receivable $ 5,000 43,000 Partner -HJ Liabilities Accounts payable G, Capital H, Capital Ownership interest 20% 5% 75% 100% Partners' Capital $30,000 $48,000 Required: Prepare journal entries to record the following unrelated scenarios: 5. New partner I purchases partners G's partnership interest for $40,000. 6. New partner I receives a cash bonus of $2,000 and a one-tenth ownership share, allocated equally from the partnership interests of G and H. 7. New partner I contributes land with a fair value of $100,000. Relative ownership interests after this transaction are: $ 8,000 10,000 40,000 $48,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Admitting New Partner With Bonus L. Bowers and V. Lipscomb are partners in Elegant Event Consultants. Bowers and Lipscomb share income equally. M. Ortiz will be admitted to the partnership. Prior to the admission, equipment was revalued downward by $10,000. The capital balances of each partner are $131,000 and $185,000, respectively, prior to the revaluation. Question Content Area a. Provide the journal entry for the asset revaluation. If an amount box does not require an entry, leave it blank. blank - Select - - Select - - Select - - Select - - Select - - Select - Question Content Area b. Provide the journal entry for Ortiz’s admission under the following independent situations: 1. Ortiz purchased a 20% interest for $66,000. If an amount box does not require an entry, leave it blank. blank - Select - - Select - - Select - - Select - - Select - - Select - - Select - - Select - Question Content…
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