Question

Admitting new partner with bonus Instructions Chart of Accounts Starting Que Instructions Cody Jenkins and Lacey Tanner formed a partnership to provide landscaping services. Jenkins and Tanner shared profits and losses equally. After all the tangible assets have been adjusted to current market prices, the capital accounts of Cody Jenkins and Lacey Tanner have balances of $75,100 and $36.000, respectively. Valeria Solano has expertise with using the computer to prepare landscape designs, cost estimates, and renderings. Jenkins and Tanner deem these skills useful thus, Solano is admitted to the partnership at a 30% interest for a purchase price of $31,100 Required: A Determine the recipient and amount of the partner bonus. B. On December 31, provide the journal entry to admit Solano into the partnership Refer to the Chart of Accounts for exact wording of account titles c. Why would a bonus be paid in this situation? Check My Work 10 more Check My Work uses remaining. < Previous Next > Email Instructor Save and Submit Astonment for Gradina

Answer 1

Total Capital	142200		=75100+36000+31100
Solano's share	42660		=142200*30%
a
Recipient	Valeria Solano
Amount of the partner Bonus	11560		=42660-31100
b
Date	Description	Debit	Credit	Assets	Liabilities	Equity
December 31	Cash	31100		↑
	Cody Jenkins, Capital	5780				↓
	Lacey Tanner, Capital	5780				↓
	Valeria Solano, Capital		42660			↑
c
Jenkins and Tanner Apparently value the expertise offered by Solano.