The capital accounts of Hope and Indiana have balances of $115,000 and $95,000,
ID: 2653438 • Letter: T
Question
The capital accounts of Hope and Indiana have balances of $115,000 and $95,000, respectively. Clint and Casey are to be admitted to the partnership. Clint buys one-fifth of Hope's interest for $30,000 and one-fourth of Indiana's interest for $20,000. Casey contributes $45,000 cash to the partnership, for which he is to receive an ownership equity of $45,000.
Journalize the entries to record the admission of (a) Clint and (b) Casey. For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".
What are the capital balances of each partner after the admission of the new partners?
Hope $ Indiana $ Clint $ Casey $Explanation / Answer
capital balances:
no. Account title Debit credit 1 Hope capital [115000*1/5 ] 23,000 Indiana capital [95,000*1/4] 23,750 clint capital 46,750 [Being hope and indianca share of partnership acquired by clint is recorded.any profit or loss on acquisition is ignored] 2 cash 45,000 casey capital 45,000 [Being casey share of interest in partnership is recorded]Related Questions
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