Question
The Distance Plus partnership has the following capital balances at the beginning of the current year: Tiger (40% of profits and losses) $ 120,000 Phil
The Distance Plus partnership has the following capital balances at the beginning of the current year:
| Tiger (40% of profits and losses) | $ | 120,000 |
| Phil (30%) | 90,000 | |
| Ernie (30%) | 105,000 | |
Each of the following questions should be viewed independently.
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If Sergio invests $150,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used.
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If Sergio invests $71,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used.
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If Sergio invests $80,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the goodwill method is used.
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