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    Journal Entries for Inclusion of a New Partner

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    The capital accounts of Susan Yu and Ben Hardy have balances of $100,000 and $90,000 respectively. Ken Mahl and Jeff Wood are to be admitted to the partnership. Mahl buys one-fourth of Yu's interest for $27,500 and one-firth of Hardy's interest for $20,000. Wood contributes $35,000 cash to the partnership, for which he is to receive ownership equity of $35,000.

    (a) Journalize the entries to record the admission for (1) Mahl and (2) Wood.
    (b) What are the capital balances of each partner after the admission of the new partners?

    See attached "Word" file. Please do exercise in "Excel" file. Explain each step in simplest form.

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    (a) Journalize the entries to record the admission for (1) Mahl and (2) Wood.

    in$
    Susan Yu's Capital A/c Dr 27500
    To Ken ...

    Solution Summary

    This solution contains the procedure of journalizing the transactions in case of admission of a new partner to a Partnership.

    $2.19

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