The capital accounts of Trent Henry and Tim Chou have balances of $146,000 and $93,800, respectively. LeAnne Gilbert and Becky Clarke are to be admitted to the partnership. Gilbert buys one-fifth of Henrys interest for $29,100 and one-fourth of Chous interest for $21,300. Clarke contributes $69,400 cash to the partnership, for which she is to receive an ownership equity of $69,400.

Required:

A.

On December 31, journalize the entries to record the admission of (1) Gilbert and (2) Clarke. Refer to the Chart of Accounts for exact wording of account titles.

B.

What are the capital balances of each partner after the admission of the new partners?

CHART OF ACCOUNTS

Henry, Chou, Gilbert, and Clarke

General Ledger

	ASSETS
110	Cash
111	Petty Cash
112	Accounts Receivable
113	Allowance for Doubtful Accounts
114	Interest Receivable
115	Notes Receivable
116	Inventory
117	Office Supplies
118	Store Supplies
119	Prepaid Insurance
120	Land
123	Equipment
124	Accumulated Depreciation-Equipment
129	Asset Revaluations
133	Patent

	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	Trent Henry, Capital
311	Trent Henry, Drawing
312	Tim Chou, Capital
313	Tim Chou, Drawing
314	LeAnne Gilbert, Capital
315	LeAnne Gilbert, Drawing
316	Becky Clarke, Capital
317	Becky Clarke, Drawing

	REVENUE
410	Sales
610	Interest Revenue

A. On December 31, journalize the entries to record the admission of (1) Gilbert and (2) Clarke. Refer to the Chart of Accounts for exact wording of account titles

JOURNAL

ACCOUNTING EQUATION

Score: 49/63

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5

B. What are the capital balances of each partner after the admission of the new partners?

Partner	Capital Balance
Trent Henry, Capital
Tim Chou, Capital
LeAnne Gilbert, Capital
Becky Clarke, Capital