Andrew Hall and Brian Li formed a partnership to provide landscaping services. Hall and Li shared profits
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Andrew Hall and Brian Li formed a partnership to provide landscaping services. Hall and Li shared profits and losses equally. After all the tangible assets have been adjusted to current market prices, the capital accounts of Andrew Hall and Brian Li have balances of $54,000 and $71,000, respectively. Kristin Lane has expertise with using the computer to prepare landscape designs, cost estimates, and renderings. Hall and Li deem these skills useful; thus, Lane is admitted to the partnership at a 30% interest for a purchase price of $35,000.
a. Determine the recipient and amount of the partner bonus.
b. Provide the journal entry to admit Lane into the partnership.
c. Why would a bonus be paid in this situation?
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
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a Bonus received by Lane Andrew Hall Capital 54000 Brian Li Capital 71000 Lanes contribution 35000 T...View the full answer
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