5) Record transactions relating to partnerships. a) Admission of a New Partner: David Breck has a capital balance of $20,000 and he sells one half of his partnership interest to Cris Davis for $18,000 on January 4th, 2003. Breck is selling a $10,000 recorded interest in the partnership. Write the journal entry for this transaction. b) Admission of a new partner : David Breck decides that he would like to remain in the business, and instead Cris Davis invests $18,000 cash in the business. Record the journal entry for this transaction.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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