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Question
The capital accounts of Hope and Indiana have balances of $115,000 and $95,000, respectively. Clint and Casey are to be admitted to the partnership. Clint buys 20% of Hope’s interest for $30,000 and 25% of Indiana’s interest for $20,000. Casey contributes $45,000 cash to the partnership, for which he is to receive an ownership equity of $45,000.
a. Journalize the entries for the admission of (1) Clint and (2) Casey.
b. What are the capital balances of each partner after the admission of the new partners?
Answer
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