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a. Prepare the journal entry to record Jeffrey's entrance into the partnership on January 2, 2021.

a. Prepare the journal entry to record Jeffrey's entrance into the partnership on January 2, 2021.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Prince-Robbins partnership has the following capital account balances on January 1, 2021: Prince, Capital Robbins, Capital $ 150,000 140,000 Prince is allocated 60 percent of all profits and losses with the remaining 40 percent assigned to Robbins after interest of 6 percent is given to each partner based on beginning capital balances. On January 2, 2021, Jeffrey invests $85,000 cash for a 20 percent interest in the partnership. This transaction is recorded by the goodwill method. After this transaction, 6 percent interest is still to go to each partner. Profits and losses will then be split as follows: Prince (50 percent), Robbins (30 percent), and Jeffrey (20 percent). In 2021, the partnership reports a net income of $24,000. a. Prepare the journal entry to record Jeffrey's entrance into the partnership on January 2, 2021.
Transcribed Image Text:The Prince-Robbins partnership has the following capital account balances on January 1, 2021: Prince, Capital Robbins, Capital $ 150,000 140,000 Prince is allocated 60 percent of all profits and losses with the remaining 40 percent assigned to Robbins after interest of 6 percent is given to each partner based on beginning capital balances. On January 2, 2021, Jeffrey invests $85,000 cash for a 20 percent interest in the partnership. This transaction is recorded by the goodwill method. After this transaction, 6 percent interest is still to go to each partner. Profits and losses will then be split as follows: Prince (50 percent), Robbins (30 percent), and Jeffrey (20 percent). In 2021, the partnership reports a net income of $24,000. a. Prepare the journal entry to record Jeffrey's entrance into the partnership on January 2, 2021.
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