4. The Statement of Financial Position of the XY partnership on December 31, 2018, appears below.

X and Y share profits and losses in the ratio 50:50. Each of the following questions is independent of the others.

Prepare journal entries for each of the following:

Use bonus method where appropriate and show all computations.

a. Refer to the above information. Assume that Z purchases a one-fourth proportionate capital interest directly from Y for a total of $60,000. (Direct purchase)

b. Refer to the above information. Assume Z invests $60,000 cash into the XY partnership for a one-fourth interest in partnership capital and profits.

c. Refer to the above information. Assume that Z invests $80,000 cash into the XY partnership for a one-fifth interest in partnership capital and profits.

Cash Other Assets $ 60,000 Liabilities 200,000 X, Capital Y, Capital $260,000 Total Liabilities and Capital $ 60,000 90,000 110,000 $260,000 Total Assets