New Partner Admission: Purchase of Existing Interest
The capital balances for the partnership of Ajeet, Rahul, and Suresh are as follows:
CapitalAjeet	400,000.00
CapitalRahu	350,000.00
CapitalSuresh	500,000.00
The partnership profit-sharing ratio is 3:2:5. A new partner, Harish, enters the partnership by purchasing existing interests in the partnership.
Required
Prepare the journal entry to record Harishs admission to the partnership, and compute the new capital balances, in each of the following cases.
a. Harish pays Ajeet $450,000 for his entire interest in the partnership. There is no revaluation of partnership assets.
Journal entry to record Harishs admission to the partnership:
	Debit	Credit
CapitalAjeet	$
CapitalHarish		$
New Capital Balance
CapitalAjeet	$
CapitalHarish	$
CapitalRahu	$
CapitalSuresh	$
b. Harish pays the three partners a total of $420,000 for 20 percent of each of the partners interests. There is no revaluation of partnership assets.
Journal entry to record Harishs admission to the partnership:
	Debit	Credit
CapitalAjeet	$	$
CapitalRahu	$	$
CapitalSuresh	$	$
CapitalHarish	$	$
New Capital Balance
CapitalAjeet	$
CapitalHarish	$
CapitalRahu	$
CapitalSuresh	$
c. Repeat part b, assuming revaluation of partnership assets by recording goodwill.
Journal entry to record Harishs admission to the partnership:
	Debit	Credit
CapitalAjeet	$	$
CapitalRahu	$	$
CapitalSuresh	$	$
Goodwill/Cash	$	$
New Capital Balance
CapitalAjeet	$
CapitalHarish	$
CapitalRahu	$
CapitalSuresh	$