Pam and John are partners in the PJs partnership, having capital balances of $120,000 and $40,000, respectively, and share income in a ratio of 3:1. Gerry is to be admitted into the partnership with a 20 percent interest in the business.

Required: Prepare journal entries to record Gerrys admission into the partnership for each of the following independent situations.

a. Gerry invests $50,000, and goodwill is to be recorded. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. Gerry invests $50,000. Total capital is to be $210,000; the partners use the bonus method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

c. Gerry purchases the 20 percent interest by directly paying Pam $50,000. Gerry is assigned 20 percent interest in the partnership solely from Pams capital account. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

d. Gerry invests $35,000. Total capital is to be $195,000; the partners use the bonus method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

e. Gerry invests $35,000, and goodwill is to be recorded. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

f. Gerry invests $35,000. During the valuation process made as part of admitting the new partner, the partnerships inventory is determined to be overvalued by $20,000 because of obsolescence. PJs partnership uses the lower-of-cost-or-market value method for inventories. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)