Myles Etter and Crystal Santori are partners who share in the income equally and have capital balances of $199,800 and $62,680, respectively. Etter, with the consent of Santori, sells one-third of his interest to Lonnie Davis.

Required:

Assume the sale occurs on December 31. What entry is required by the partnership if the sales price is (a) $66,600? (b) $87,700? Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

Chart of Accounts

CHART OF ACCOUNTS

Etter, Santori and Davis

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	Equipment
124	Accumulated Depreciation-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	Myles Etter, Capital
311	Myles Etter, Drawing
312	Crystal Santori, Capital
313	Crystal Santori, Drawing
314	Lonnie Davis, Capital
315	Lonnie Davis, 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

Journal

Assume the sale occurs on December 31. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Scroll down to access parts (a) and (b) of the exercise.

(a) What entry is required by the partnership if the sales price is $66,600?

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

(b) What entry is required by the partnership if the sales price is $87,700?

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JOURNAL

ACCOUNTING EQUATION

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