Partner Admission: Investment of New Capital

The capital balances for the partnership of Liang, Tan, and Wu are as follows:

CapitalLiang	$50,000
CapitalTan	250,000
CapitalWu	140,000

The partnership profit-sharing ratio is 1:6:3. A new partner, Gao, enters the partnership by investing cash directly in the partnership.

Required

Prepare the journal entry to record Gaos admission to the partnership, in each of the following cases.

a. Gao invests $60,000 for a 12 percent interest in the partnership.

Description	Debit	Credit
AnswerCashGoodwillCapital-Gao	Answer	Answer
AnswerCashGoodwillCapital-Gao	Answer	Answer

b. Gao invests $50,000 for a 12 percent interest in the partnership. The bonus method is used.

Description	Debit	Credit
AnswerCashGoodwillCapital-Gao	Answer	Answer
CapitalLiang	Answer	Answer
CapitalTan	Answer	Answer
CapitalWu	Answer	Answer
AnswerCashGoodwillCapital-Gao	Answer	Answer

c. Gao invests $72,000 for a 12 percent interest in the partnership. The goodwill method is used, and any revaluation is attributed to goodwill.

Description	Debit	Credit
Cash	Answer	Answer
AnswerCashGoodwillCapital-Gao	Answer	Answer
CapitalLiang	Answer	Answer
CapitalTan	Answer	Answer
CapitalWu	Answer	Answer
AnswerCashGoodwillCapital-Gao	Answer	Answer