Jacob and Kyle are partners in JK Construction Services. Their capital accounts are currently as follows:

Jacob $460,000

Kyle 340,000

Total capital $800,000

Jacob and Kyle share income equally. Partnership identifiable net assets are reported at amounts approximating fair value. Lester purchases a 20 percent interest in the partnership by paying Jacob and Kyle a total of $175,000 for 20 percent of each of their interests in the partnership. Required Record the addition of Lester to the partnership, using:

The implied goodwill method