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Question
S. Stephens and J. Perez are partners in Space Designs. Stephens and Perez share income equally. D. Fredericks will be admitted to the partnership. Prior to the admission, equipment was revalued downward by $8,000. The capital balances of each partner are $100,000 and $139,000, respectively, prior to the revaluation. Space Designs does not use the temporary asset revaluation account.
a. Journalize the entry for the asset revaluation.
b. Journalize the entry for Fredericks’ admission under the following independent situations:
(1) Fredericks purchased a 20% interest for $50,000.
(2) Fredericks purchased a 30% interest for $125,000.
Answer
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