P 16-10 Recording new partner investment—Various situations The AT Partnership was organized several years ago, and on January 1, 2016, the partners agree to admit Car for a 40 percent interest in capital and earnings. Capital account balances and profit- and loss-sharing ratios at January 1, 2016, before the admission of Car, are as follows:

Aid (50%) $500,000 Tha (50%) 280,000 REQuIRED: Prepare journal entries to record the admission of Car for a 40 percent interest in the capital and rights to future profits under the following independent assumptions.

1. Car pays $450,000 directly to Aid and Tha for 40 percent of each of their interests, and the bonus procedure is used.

2. Car pays $600,000 directly to Aid and Tha for 40 percent of each of their interests, and goodwill is recorded.

3. Car invests $450,000 in the partnership for her 40 percent interest, and goodwill is recorded.

4. Car invests $600,000 in the partnership for her 40 percent interest, and goodwill is recorded.