Admission by Investment of Assets

Rizal Meds is a medical partnership of Dr. John Pete Sarabla and Dr. Angeles De Guzman, who share profits and losses in a 2:3 ratio. Dr. Elizabeth Salvador has been asked to join the partnership. Prior to admitting Salvador, the assets of Rizal Meds were revalued to reflect their current market values. The revaluation resulted in medical equipment being increased by P35,000 Prior to the revaluation, the equity balances for Sarabia and De Guzman were P201,000 and P289,000, respectively.

Required:

1 Prepare the journal entry for the asset revaluation

2. Prepare the journal entry to record the admission under the following independent situations:

a.Salvador invested P285,000 for a 30% interest in Rizal Meds

b. Salvador invested P155,000 for a 25% interest in Rizal Meds.