- A condensed balance sheet for the partnership of Moon River Karaoke Club, owned by Li and Liu, at June 30 is shown below. On this date the two partners agreed to admit a new partner Lo. Li and Liu have been dividing profits in a ratio of 3:2 (that is 60% and 40%). The new partnership will have a profit-and-loss sharing ratio of Lo, 50% ; Li, 25% and Liu, 25%. Moon River Karaoke Club Balance Sheet June 30, 200 x Current assets 180 000 Liabilities 160 000 Partners' capitals: Plant & equipment (net) 420 000 Li, Capital 280 000 Liu, Capital 160 000 440 000 Total 600 000 Total 600 000 Instructions: Described below are four different situations under which Lo might be admitted to the partnership considering each independently. Prepare the journal entries necessary to record the admission of Lo to the firm. a. Lo purchases a one-half interest ( 50% of the entire ownership equity) in the partnership from Li for 290 000 yuan. Payment is made to Li as an individual. b. Lo purchases one-half of Li's interest and one-half of Liu's interest, paying Li 172 000 yuan and Liu 98 000 yuan. - A condensed balance sheet for the partnership of Moon River Karaoke Club, owned by Li and Liu, at June 30 is shown below. On this date the two partners agreed to admit a new partner Lo. Li and Liu have been dividing profits in a ratio of 3:2 (that is 60% and 40%). The new partnership will have a profit-and-loss sharing ratio of Lo, 50% ; Li, 25% and Liu, 25%. Moon River Karaoke Club Balance Sheet June 30, 200 x Current assets 180 000 Liabilities 160 000 Partners' capitals: Plant & equipment (net) 420 000 Li, Capital 280 000 Liu, Capital 160 000 440 000 Total 600 000 Total 600 000 Instructions: Described below are four different situations under which Lo might be admitted to the partnership considering each independently. Prepare the journal entries necessary to record the admission of Lo to the firm. a. Lo purchases a one-half interest ( 50% of the entire ownership equity) in the partnership from Li for 290 000 yuan. Payment is made to Li as an individual. b. Lo purchases one-half of Li's interest and one-half of Liu's interest, paying Li 172 000 yuan and Liu 98 000 yuan