Problem

Accounting for the admission of a new partner [5–10 min]Persimmon has $75,000 capital and...

Accounting for the admission of a new partner [5–10 min]

Persimmon has $75,000 capital and Hawk has $45,000 capital in the Persimmon & Hawk partnership. Persimmon and Hawk share profits and losses equally. Judy Pound invests cash of $40,000 to acquire a 1/4 interest in the new partnership.

Requirements

1. Calculate Pound’s capital in the new partnership.


2. Journalize the partnership’s receipt of the $40,000 from Pound.

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