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Question
Watson purchased one-half of Dalton’s interest in the Patton and Dalton Partnership for $45,000. Prior to the investment, land was revalued to a market value of $135,000 from a book value of $93,000. Patton and Dalton share net income equally. Dalton had a capital balance of $35,000 prior to these transactions.
a. Journalize the entry for the revaluation of land. (The partnership does not use the temporary asset revaluation account.)
b. Journalize the entry to admit Watson.
Answer
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