Dobson, Lancaster, and Pender are partners who share profits and losses 50%, 30%, and 20%, respectively. Their

Question:

Dobson, Lancaster, and Pender are partners who share profits and losses 50%, 30%, and 20%, respectively. Their capital balances are $150,000, $90,000, and $60,000, respectively.

Instructions

(a) Assume Shannon joins the partnership by investing $140,000 for a 25% interest with bonuses to the existing partners. Prepare the journal entry to record his investment.

(b) Assume instead that Dobson leaves the partnership. Dobson is paid $170,000 with a bonus to the retiring partner. Prepare the journal entry to record Dobson's withdrawal.

Partnership
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...