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Please show work notes, thank you & stay safe! Exercise 15-1 John, Jeff, and Jane decided to engage in a real estate venture as a
Please show work notes, thank you & stay safe!
Exercise 15-1 John, Jeff, and Jane decided to engage in a real estate venture as a partnership. John invested $112,400 cash and Jeff provided office equipment that is carried on his books at $80,400. The partners agree that the equipment has a fair value of $112,300. There is a $27,000 note payable remaining on the equipment to be assumed by the partnership. Although Jane has no physical assets to invest in the partnership, both John and Jeff believe that her experience as a real estate appraiser is a valuable skill needed by the partnership and is a basis for granting her a capital interest in the partnership. Assuming that each partner is to receive an equal capital interest in the partnership, (a) Your answer is correct. Record the partnership formation under the bonus method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Account Titles and Explanation Debit Credit Cash 112400 Equipment 112300 Notes Payable 27000 John, Capital 65900 Jeff, Capital 65900 Jane, Capital 65900 (b) Your answer is partially correct. Try again. Record the partnership formation under the goodwill method, and assume a total goodwill of $84,600. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Account Titles and Explanation Debit Credit Cash 112400 Equipment 112300 NO x Goodwill 98850 Notes Payable 27000 X John, Capital 65900 Jeff, Capital 65900 Jane, Capital 65900Step by Step Solution
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