Problem 12-4A

At April 30, partners capital balances in PDL Company are: G. Donley $53,200, C. Lamar $47,400, and J. Pinkston $15,700. The income sharing ratios are 5 : 4 : 1, respectively. On May 1, the PDLT Company is formed by admitting J. Terrell to the firm as a partner.

Journalize the admission of Terrell under each of the following independent assumptions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

(1) Terrell purchases 50% of Pinkstons ownership interest by paying Pinkston $15,810 in cash. (2) Terrell purchases 331/3% of Lamars ownership interest by paying Lamar $14,060 in cash. (3) Terrell invests $62,200 for a 30% ownership interest, and bonuses are given to the old partners. (4) Terrell invests $43,100 for a 30% ownership interest, which includes a bonus to the new partner.

No. Account Titles and Explanation Debit Credit 1. J. Terrell, Capital G. Donley, Capital J. Pinkston, Capital Salaries Expense Accounts Receivable C. Lamar, Capital Accounts Payable Distributions Cash G. Donley, Capital Accounts Payable Salaries Expense Distributions J. Pinkston, Capital C. Lamar, Capital Accounts Receivable J. Terrell, Capital Cash 2. Distributions Accounts Payable Salaries Expense J. Terrell, Capital C. Lamar, Capital J. Pinkston, Capital Cash G. Donley, Capital Accounts Receivable G. Donley, Capital Accounts Receivable Accounts Payable Salaries Expense Distributions J. Pinkston, Capital J. Terrell, Capital C. Lamar, Capital Cash 3. Cash J. Pinkston, Capital J. Terrell, Capital C. Lamar, Capital Distributions G. Donley, Capital Accounts Receivable Accounts Payable Salaries Expense Accounts Receivable Distributions J. Pinkston, Capital Salaries Expense Cash J. Terrell, Capital C. Lamar, Capital Accounts Payable G. Donley, Capital J. Terrell, Capital J. Pinkston, Capital Accounts Payable Accounts Receivable C. Lamar, Capital Cash Salaries Expense Distributions G. Donley, Capital G. Donley, Capital Cash C. Lamar, Capital Accounts Receivable Accounts Payable J. Terrell, Capital Salaries Expense Distributions J. Pinkston, Capital C. Lamar, Capital Accounts Payable J. Pinkston, Capital G. Donley, Capital Salaries Expense Distributions J. Terrell, Capital Cash Accounts Receivable 4. C. Lamar, Capital J. Pinkston, Capital Cash Accounts Receivable J. Terrell, Capital G. Donley, Capital Distributions Accounts Payable Salaries Expense Accounts Payable J. Pinkston, Capital Accounts Receivable Salaries Expense J. Terrell, Capital Distributions C. Lamar, Capital Cash G. Donley, Capital G. Donley, Capital Accounts Receivable Accounts Payable J. Terrell, Capital Cash Salaries Expense Distributions J. Pinkston, Capital C. Lamar, Capital C. Lamar, Capital J. Pinkston, Capital Accounts Receivable J. Terrell, Capital Salaries Expense Distributions Cash G. Donley, Capital Accounts Payable Distributions J. Terrell, Capital G. Donley, Capital Salaries Expense J. Pinkston, Capital Accounts Receivable C. Lamar, Capital Cash Accounts Payable

Lamars capital balance is $38,910 after admitting Terrell to the partnership by investment. If Lamars ownership interest is 20% of total partnership capital, what were Terrells cash investment and the bonus to the new partner?

Terrells cash investment $ Bonus to new partner $