It is that form of organization which is owned and managed by two or more persons who invest and share the profits and losses according to a pre-determined ratio.
Forming a Partnership
While forming the partnership, the contribution of assets by partners are debited to the partnership assets account; whereas the liabilities of the partnerships are credited to the partnership’s liabilities account, and the net amount of the investments of partners are credited to the partners’ individual capital account.
To record: The journal entry for the asset revaluation.
To provide: The journal entry
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