Question

Problem 12-5A Partner withdrawal and admission LO P3, P4

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Meir, Benson, and Lau are partners and share income and loss in a 1:4:5 ratio (in percents: Meir, 10%; Benson, 40%; and Lau, 50%). The partnership's capital balances are as follows: Meir, $28,000; Benson, $119,000; and Lau, $153,000. Benson decides to withdraw from the partnership.

Problem 12-5A Part 2

2. Assume that Benson does not retire from the partnership described in Part 1. Instead, Rhode is admitted to the partnership on February 1 with a 25% equity. Prepare journal entries to record Rhode’s entry into the partnership under each separate assumption: Rhode invests (a) $100,000; (b) $73,000; and (c) $131,000. (Do not round your intermediate calculations.)

Journal entry worksheet 2 3 Record the admission of Rhode with an investment of $100,000 for a 25% interest in the equity. Note: Enter debits before credits. General Journal Debit Credit Transaction (a) Record entry Clear entry View general journal

Answer 1

Req. 1	Accounts title and explanations	Debit	Credit
	Cash	$ 100,000
	Rhode's capital		$ 100,000
	Note:
	Capital before addmission	$ 300,000
	(28000+119000+153000)
	Add: Rhode capital	$ 100,000
	Total capital	$ 400,000
	Rhode's share of capital	$ 100,000
	No Bonus	$            -
Req. 2	Accounts title and explanations	Debit	Credit
	Cash	$   73,000
	Meir Capital	$     2,025
	Benson Capital	$     8,100
	Lau capital	$   10,125
	Rhode' capital		$   93,250
	Note:
	Capital before addmission	$ 300,000
	Add: Rhode capital	$   73,000
	Total capital	$ 373,000
	Rhode's share of capital	$   93,250
	Bonus to Rhode	$   20,250
Req. 3	Accounts title and explanations	Debit	Credit
	Cash	$ 131,000
	Rhode's capital		$ 107,750
	Meir capital		$     2,325
	Benson Capital		$     9,300
	Lau capital		$   11,625
	Note:
	Capital before addmission	$ 300,000
	Add: Rhode capital	$ 131,000
	Total capital	$ 431,000
	Rhode's share of capital	$ 107,750
	Bonus to other partners	$   23,250