Linda and Sara are partners who share profits 60% and 40%. Their capital balance

Question

Linda and Sara are partners who share profits 60% and 40%. Their capital balances were both $180,000 before Kim was admitted to the partnership. Kim paid $100,000 each to Linda and Sara for purchase of a 25% interest in the partnership. After her admission to the partnership,

Kim will have a capital balance of $____________.

I honestly don't even know where to begin..am I supposed to show a journal entry?? His her capital balance just what she put into the business, $300,000? I would really appreciate your help and guidance with answering this question.

Explanation / Answer

90,000
25% of (180,000 + 180,000) = 90,000
This is because the purchase of a partnership interest is a personal transaction between current partner(s) and the new partner.
Journal entries would be (assuming Linda and Sarah are giving equal amounts)
Debit Linda's capital Account for $45,000
Debit Sara's capital account for $45,000
Credit Kim's capital account for $90,000

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