The Distance Plus partnership has the following capital balances at the beginning of the current year along with respective profit and loss percentages:

Tiger (40%)

$ 125,000

Phil (20%)

95,000

Ernie (40%)

110,000

Each of the following questions should be viewed independently.

Required:

a If Sergio invests $150,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used.

b If Sergio invests $140,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used.

c If Sergio invests $150,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the goodwill method is used.