Bow and Mon are partners in a retail business and divide profits 60 percent to Bow and 40 percent to Mon. Their capital balances at December 31, 2016, are as follows:
Bow capital ............... $120,000
Mon capital ................ 120,000
Total capital ............... $240,000
Partnership assets and liabilities have book values equal to fair values. The partners agree to admit Joh into the partnership. Joh purchases a one-third interest in partnership capital and profits directly from Bow and Mon (one-third of each of their capital accounts) for $100,000.
REQUIRED:
Prepare journal entries for the admission of Joh into the partnership, assuming that partnership assets are revalued.