Accounting for the admission of a new partner
East and Hunter have partner capital balances of $227,000 and $173,000, respectively. East gets 70% of profits and losses, and Hunter gets 30%. Assume Power invests $100,000 to acquire a 25% interest in the new partnership of East Hunter.
Requirements
1. Calculate Power’s capital in the new partnership.
2. Journalize the partnership’s receipt of cash from Power.
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