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    Advance accounting establishing a Partnership

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    Creation of New Subsidiary
    Krantz Company and Dull Corporation decided to form a partnership. Krantz agreed to transfer the following assets and accounts payable to K&D Partnership in exchange for 60 percent ownership:

    Cost Book Value

    Cash $ 10,000 $ 10,000
    Inventory 30,000 30,000
    Land 70,000 70,000
    Buildings 200,000 150,000
    Equipment 120,000 90,000
    Accounts Payable 50,000 50,000

    Dull agreed to contribute cash of $200.000 to K&D Partnership

    Required
    a) Give the journal entries that K&D recorded for its receipt of assets and accounts payable from Krantz and Dull.
    b) Give the journal entries that Krantz and Dull recorded for their transfer of assets and accounts payable to K&D Partnership.

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    1 Journal Entries in the books of K & D partnership to record transfer of assets and ...

    Solution Summary

    The solution discusses accounting and establishing a partnership. Journal entries that K&D recorded for its receipt of assets and accounts payable from Krantz and Dull are given.

    $2.49

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