Question

The Struter Partnership has total partners' equity of $510,000, which is made up of Main, Capital, $400,000, and Frist, Capital $110,000. The partners share net income and loss in a ratio of 80% to Main and 20% to Frist On November 1, Adison is admitted to the partnership and given a 15% interest in the equity and a 15% share in any income and loss. Prepare journal entries to record the admission of Adison for a 15% interest in the equity and a 15% share in any income and loss under independent assumption. (1) Record the admission of Adison with an investment of $90,000 for a 15% interest in the equity and a 15% share in any income and loss. (2) Record the admission of Adison with an investment of $120,000 for a 15% interest in the equity and a 15% share in any income and loss. (3) Record the admission of Adison with an investment of $80,000 for a 15% interest in the equity and a 15% share in any income and loss. View transaction list Journal entry worksheet < A B с Record the admission of Adison with an investment of $90,000 for a 15% interest in the equity and a 15% share in any income and loss. Credit Debit Note: Enter debits before credits General Journal Transaction (1)

Answer 1

	I	Date	Account Title	Debit	Credit
			Cash	90,000		(510000+90000)*15%
			Madison Capital		90,000
				90,000	90,000
	II	Date	Account Title	Debit	Credit
			Cash	120,000
			Madison Capital		94,500
			Main, Capital		20,400
			First .Capital		5,100
			(admission of Madison)	120,000	120,000
			Workings
			Existing Partners Equity	510,000
		Add:	Investment by madison	120,000
				630,000
			Madison Capital(630000 X 15%)	94,500
			Main Capital(120000-94500) X 80%	20,400
			First Capital((120000-94500) X 20%)	5,100
	III	Date	Account Title	Debit	Credit
			Cash	80,000
			Madison Capital		88,500
			Main, Capital	6,800
			First .Capital	1,700
				88,500	88,500
			Workings
			Existing Partners Equity	510,000
		Add:	Investment by madison	80,000
				590,000
			Madison Capital(590000 X 15%)	88,500
			Main Capital(80000-88500) X 80%	(6,800)
			First Capital(80000-88500) X 20%	(1,700)