75,000 Problema III The Vernica and Hermarie Partnership has partner capital account balances as follows: Vernica, Capital Hemarie, Capital $400,000 350,000 570 20 The partners share income and losses in the ratio of 40% to Vernica and 60% to Hermarie. Instructions: Prepare the journal entry on the books of the partnership to record the admission of Leonardo as a new partner under the following three independent circumstances. 1. Leonardo pays $300,000 to Vernica and $175,000 to Hermarie for one-half of each of their ownership interest in a personal transaction. 2. Leonardo invests $570,000 in the partnership for a one-third interest in partnership capital. 3. Leonardo invests $210,000 in the partnership for a one-third interest in partnership capital. Problem III - Solution DATE (1) GENERAL JOURNAL ACCOUNT DESCRIPTION Veronica Capital Hermarie Capital Leonardes Ownership interest transferred to Leonardo: Capital Vernica: 400,000-2 = 200,000 Hermarie: 350,000-2 175,000 (2) Cash Veronica Capital Hermarie Capita Leonardos Capital Total capital of existing partnership Investment by new partner, Leonardo Total capital of new partnership Leonardo's capital credit = Leonardo's investment Leonardo's capital credit Bonus to old partners Allocation to old partners Vernica Hermarie Total (3) Pag. 1 REF DEDIT 200000 75,000 CREDIT 375,000 570,000 52,000 $8,000 440,000 $ 750,000 570000 $ 1320,000 $570,000 440000 440 000X 1/3 = 146,666 $132290 1,320,000 x 113 52,000 130000 X 40% 130,000 60% = 78,000 X Cash Veronica Capital Her mavie Colpita Capital Leonardos caith Total capital of existing partnership Investment by new partner, Leonardo Total capital of new partnership $ 52,000 78.000 $130.000 210.000 44,088 66,000 $150,000 2.10000 $960,000 320,000 Leonardo's capital credit = 960,000 1/3 = 320,000 Bonus to Leonardo: Reduction of old partners' capital X Vernica: 110,000 x 40% 44,000 = Hermarie: 110,000 60% = 66,000 Total $ 44,000 661000 $110,000