Admitting New Partners Who Buy an Interest and Contribute Assets The capital accounts of Trent Henry and Tim Chou have balances of $142,000 and $102,400, respectively. LeAnne Gilbert and Becky Clarke are to be admitted to the partnership. Gilbert buys one-fifth of Henry’s interest for $32,700 and one-fourth of Chou’s interest for $22,500. Clarke contributes $34,600 cash to the partnership, for which she is to receive an ownership equity of $34,600. a1. Journalize the entry to record the admission of Gilbert. For a compound transaction, if an amount box does not require an entry, leave it blank. a2. Journalize the entry to record the admission of Clarke. b. What are the capital balances of each partner after the admission of the new partners? Partner Capital Balance Trent Henry $ Tim Chou $ LeAnne Gilbert $ Becky Clarke $
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.
Admitting New Partners Who Buy an Interest and Contribute Assets
The capital accounts of Trent Henry and Tim Chou have balances of $142,000 and $102,400, respectively. LeAnne Gilbert and Becky Clarke are to be admitted to the partnership. Gilbert buys one-fifth of Henry’s interest for $32,700 and one-fourth of Chou’s interest for $22,500. Clarke contributes $34,600 cash to the partnership, for which she is to receive an ownership equity of $34,600.
a1.
a2. Journalize the entry to record the admission of Clarke.
b. What are the capital balances of each partner after the admission of the new partners?
| Partner | Capital Balance |
| Trent Henry | $ |
| Tim Chou | $ |
| LeAnne Gilbert | $ |
| Becky Clarke | $ |
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