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The capital accounts of Trent Henry and Tim Chou have balances of $145,500 and $98,300, respectively. LeAnne Gilbert and Becky Clarke are to be admitted
The capital accounts of Trent Henry and Tim Chou have balances of $145,500 and $98,300, 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 $19,500. Clarke contributes $74,500 cash to the partnership, for which she is to receive an ownership equity of $74,500.
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? |
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