2) Carter and Grey are partners in an automobile repair business. Their respective capital balances are $425,000 and $275,000, and they share profits in a 3:2 ratio. Because of growth in their repair business, they decide to admit a new partner. Bush is admitted to the partnership, after which Carter, Grey, and Bush agree to share profits in a 3:2:1 ratio. Required: Prepare the necessary journal entries to record the admission of Bush in each of the following independent situations: A. Bush invests $300,000 for a one-fourth capital interest, but will not accept a capital balance of less than his investment. B. Bush invests $150,000 for a one-fifth capital interest. The partners agree that assets and the firm as a whole should be revalued. C. Bush purchases a 20% capital interest from each partner. Carter receives $100,000 and Grey receives $50,000 directly from Bush. Answer: A. Goodwill Carter, Capital Grey, Capital Cash Bush, Capital B. Cash Goodwill Bush, Capital C. Carter, Capital Grey, Capital Bush, Capital Debit Credit