N. Essex, C. Gilmore, and C. Heganbart have capital balances of $50,000, $40,000

Question

N. Essex, C. Gilmore, and C. Heganbart have capital balances of $50,000, $40,000, and $30,000, respectively. Their income ratios are 4 : 4 : 2. Heganbart withdraws from the partnership under each of the following independent conditions.

Journalize the withdrawal of Heganbart under each of the assumptions above. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.

Account Titles and Explanation

Debit

Credit

1.

2.

3.

1. Essex and Gilmore agree to purchase Heganbart’s equity by paying $17,000 each from their personal assets. Each purchaser receives 50% of Heganbart’s equity. 2. Gilmore agrees to purchase all of Heganbart’s equity by paying $22,000 cash from her personal assets. 3. Essex agrees to purchase all of Heganbart’s equity by paying $26,000 cash from his personal assets.

Explanation / Answer

1) C Heganbart, capital A/c (Dr) $30,000

N.Essex, Capital A/c (Cr) $17,000

C. Gilmore, Capital A/c (Cr) $17,000

2) C Heganbart, capital A/c (Dr) $30,000

C. Gilmore, Capital A/c (Cr) $30,000

3) C Heganbart, capital A/c (Dr) $30,000

N. Essex, Capital A/c (Cr) $30,000

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