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Admitting new partner with bonus L. Bowers and V. Lipscomb are partners in Elegant Event Consultants. Bowers and Lipscomb share income equally. M. Ortiz will be admitted to the partnership. Prior to the admission, equipment was revalued downward by $8,000. The capital balances of each partner are $96,000 and $40,000, respectively, prior to the revaluation. a. Provide the journal entry for the asset revaluation. b. Provide the journal entry for Ortiz's admission under the following independent situations: 1. Ortiz purchased a 20% interest for $20,000. 2. Ortiz purchased a 30% interest for $60,000.

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 12, Problem 12.14EX
Textbook Problem

Admitting new partner with bonus

L. Bowers and V. Lipscomb are partners in Elegant Event Consultants. Bowers and Lipscomb share income equally. M. Ortiz will be admitted to the partnership. Prior to the admission, equipment was revalued downward by $8,000. The capital balances of each partner are $96,000 and $40,000, respectively, prior to the revaluation.

  1. a. Provide the journal entry for the asset revaluation.
  2. b. Provide the journal entry for Ortiz's admission under the following independent situations:
    1. 1. Ortiz purchased a 20% interest for $20,000.
    2. 2. Ortiz purchased a 30% interest for $60,000.

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Chapter 12 Solutions

Accounting
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