Alert Medical, LLC, consists of two doctors, Abrams and Lipscomb, who share in all income and losses according to a 2:3 income-sharing ratio. Dr. Lin has been asked to join the LLC. Prior to admitting Lin, the assets of Alert Medical were revalued to reflect their current market values. The revaluation resulted in medical equipment being increased by $43,000. Prior to the revaluation, the equity balances for Abrams and Lipscomb were $153,000 and $216,600, respectively.

Required:

A.

On December 31, provide the journal entry for the asset revaluation. Refer to the Chart of Accounts for exact wording of account titles.

B.

On December 31, provide the journal entry for the bonus under the following independent situations (refer to the Chart of Accounts for exact wording of account titles):

1.	Lin purchased a 30% interest in Alert Medical, LLC, for $236,800.
2.	Lin purchased a 25% interest in Alert Medical, LLC, for $118,200.

CHART OF ACCOUNTS

Alert Medical, LLC

General Ledger

	ASSETS
110	Cash
111	Petty Cash
112	Accounts Receivable
113	Allowance for Doubtful Accounts
114	Interest Receivable
115	Notes Receivable
116	Inventory
117	Office Supplies
118	Store Supplies
119	Prepaid Insurance
120	Land
123	Medical Equipment
124	Accumulated Depreciation-Medical Equipment
129	Asset Revaluations
133	Patent

	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	Abrams, Member Equity
311	Abrams, Drawing
312	Lipscomb, Member Equity
313	Lipscomb, Drawing
314	Lin, Member Equity
315	Lin, Drawing

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Merchandise Sold
520	Salaries Expense
521	Advertising Expense
522	Depreciation Expense-Equipment
523	Delivery Expense
524	Repairs Expense
529	Selling Expenses
531	Rent Expense
533	Insurance Expense
534	Office Supplies Expense
535	Store Supplies Expense
536	Credit Card Expense
537	Cash Short and Over
538	Bad Debt Expense
539	Miscellaneous Expense
710	Interest Expense

Refer to the Chart of Accounts for exact wording of account titles. Scroll down to access pages 10 and 11 of the journal.

A. On December 31, provide the journal entry for the asset revaluation.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3

B. On December 31, provide the journal entry for the bonus under the following independent situations:

1. Lin purchased a 30% interest in Alert Medical, LLC, for $236,800.

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4

2. Lin purchased a 25% interest in Alert Medical, LLC, for $118,200.

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4