Admitting New Partners Who Buy an Interest and Contribute Assets The capital accounts of Trent Henry...

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Admitting New Partners Who Buy an Interest and Contribute Assets The capital accounts of Trent Henry and Tim Chou have balanc

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Answer 1

Answer #1

S.No.	Particulars	Debit	Credit	Explanation
a1	Trent Henry, Capital	$27,600		$138,000/5
	Tim Chou, Capital	$24,800		$99,200/4
	LeAnne Gilbert, Capital		$52,400
	(To record the admission of Gilbert entry)
a2	Cash	$33,700
	Becky clarke, Capital		$33,700
	(To record the admission of Clarke entry)

Explanation:

a1-Since it is given in the question that gilbert acquired 1/5th share of Henry and 1/4th share of Chou, we shall record his admission as the given proportions of their capital balances.

a2- Since, Clarke is given a fresh share in the partnership, Her admission shall be recorded at the ownership equity value.

Partner	Capital balances	Explanation
Trent Henry	$110,400	$138,000-$27,600
Tim chou	$74,400	$99,200-$24,800
LeAnne Gilbert	$52,400
Becky Clarke	$33,700

Explanation:

We have calculated the new partner's balances in the above journal entries. As for the remaining old partners their capital balances shall be decreased by the appropriate proportion acquired by Gilbert.

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Answer 2

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