After the tangible assets have been adjusted to current market prices, the capital accounts of Cecil Jacobs and Maria Estaban have balances of $61,000 and $59,000 respectively. Lee White is to be admitted to the partnership, contributing $45,000 cash to the partnership, for which she is to receive ownership equity of $55,000. All partners share equally in income.
(a) Journalize the entry to record the admission of White, who is to receive a bonus of $10,000.
(b) What are the capital balances of each partner after the admission of the new partner?
The details are in the excel file.
a. Journal Entry - Lee White contributes 45,000 and this is reflected as a debit to cash ( cash balances increases and hence a debit). Lee White will receive $55,000 in equity. This is reflected as a credit to Lee White equity Account ( equity increases and hence a credit). The ...
The solution provides the journal entries to be made for admitting a new partner with bonus