If a new partner was admitted into the partnership by purchasing the interest of an existing partner in the amount of Php5,000,000.00. Before the purchase, the existing partner's capital account provided an amount of Php2,000,000.00. What amount would be debited and credited in the partnership's books? Php5,000,000.00 Php2,000,000.00 O Php3,000,000.00 None. Only a memorandum entry is necessary.
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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