After the tangible assets have been adjusted to current market prices, the capital accounts of Alex Jensen and Elon Craig have balances of $120,000 and $180,000, respectively.
Marco Vega is to be admitted to the partnership, contributing $70,000 cash to the part- nership, for which he is to receive an ownership equity of $78,000. All partners share equally in income. a. Journalize the entry to record the admission of Vega, who is to receive a bonus of $8,000.
b. What are the capital balances of each partner after the admission of the new partner?
c. Why are tangible assets adjusted to current market prices, prior to admitting a new partner?