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E 7. Ernie, Ron, and Denis have equity in a partnership of $40,000, $40,000,

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Admission of a New Partner: Recording a Bonus

E 7. Ernie, Ron, and Denis have equity in a partnership of $40,000, $40,000,
and $60,000, respectively, and they share income and losses in a ratio of 1:1:3.
The partners have agreed to admit Henry to the partnership. Prepare entries in journal form to record the admission of Henry to the partnership under the following
conditions:

1. Henry invests $60,000 for a 20 percent interest in the partnership, and a
bonus is recorded for the original partners.

2. Henry invests $60,000 for a 40 percent interest in the partnership, and a
bonus is recorded for Henry.

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