Hylands is admitted to the partnership of Reddick & Nole. Prior to her admission, the partnership books show Reddick's capital balance at $180,000 and Nole's at $90,000. Assume Reddick and Nole share profits and losses equally.
Requirements
1. Compute each partner's equity on the books of the new partnership under the following plans:
a. Hylands pays $100,000 for Nole's equity. Hylands pays Nole directly.
b. Hylands contributes $90,000 to acquire a 1/4 interest in the partnership.
c. Hylands contributes $135,000 to acquire a 1/4 interest in the partnership.
2. Journalize the entries for admitting the new partner under plans a, b, and c?