Phil Phoenix and Tim Tucson are partners in an electrical repair business. Their respective capital balances are $92,800 and $48,100, and they share profits and losses equally. Because the partners are confronted with personal financial problems, they decided to admit a new partner to the partnership. After an extensive interviewing process they elect to admit Don Dallas into the partnership. Prepare the journal entry to record the admission of Don Dallas into the partnership under each of the following conditions: 1. Don acquires one-fourth of Phil’s capital interest by paying $28,900 directly to him. 2. Don acquires one-fifth of each of Phil’s and Tim’s capital interests. Phil receives $24,500 and Tim receives $15,300 directly from Don. 3. Don acquires a one-fifth capital interest for a $58,200 cash investment in the partnership. Total capital after the admission is to be $199,100.
Phil Phoenix and Tim Tucson are partners in an electrical repair business. Their respective capital balances are $92,800 and $48,100, and they share profits and losses equally. Because the partners are confronted with personal financial problems, they decided to admit a new partner to the partnership. After an extensive interviewing process they elect to admit Don Dallas into the partnership. Prepare the journal entry to record the admission of Don Dallas into the partnership under each of the following conditions: 1. Don acquires one-fourth of Phil’s capital interest by paying $28,900 directly to him. 2. Don acquires one-fifth of each of Phil’s and Tim’s capital interests. Phil receives $24,500 and Tim receives $15,300 directly from Don. 3. Don acquires a one-fifth capital interest for a $58,200 cash investment in the partnership. Total capital after the admission is to be $199,100.
Chapter21: Partnerships
Section: Chapter Questions
Problem 2BCRQ
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Question
Phil Phoenix and Tim Tucson are partners in an electrical repair business. Their respective capital balances are $92,800 and $48,100, and they share profits and losses equally. Because the partners are confronted with personal financial problems, they decided to admit a new partner to the partnership . After an extensive interviewing process they elect to admit Don Dallas into the partnership.
Prepare thejournal entry to record the admission of Don Dallas into the partnership under each of the following conditions:
(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Prepare the
| 1. | Don acquires one-fourth of Phil’s capital interest by paying $28,900 directly to him. | |
| 2. | Don acquires one-fifth of each of Phil’s and Tim’s capital interests. Phil receives $24,500 and Tim receives $15,300 directly from Don. | |
| 3. | Don acquires a one-fifth capital interest for a $58,200 cash investment in the partnership. Total capital after the admission is to be $199,100. | |
| 4. | Don invests $39,820 for a one-fifth interest in partnership capital. Implicit |
(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
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Account Titles and Explanation
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Debit
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Credit
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2.
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3.
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4.
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(To record implicit goodwill)
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(To record investment by Don)
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