The capital accounts of Trent Henry and Tim Chou have balances of $142,900 and $85,800, respectively. LeAnne Gilbert and Becky Clarke are to be admitted to the partnership. Gilbert buys one-fifth of Henry's interest for $31,400 and one-fourth of Chou's interest for $20,200. Clarke contributes $74,500 cash to the partnership, for which she is to receive an ownership equity of $74,500. Required: A. On December 31, journalize the entries to record the admission of (1) Gilbert and (2) Clarke. Refer to the Chart of Accounts for exact wording of account titles. B. What are the capital balances of each partner after the admission of the new partners?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The capital accounts of Trent Henry and Tim Chou have balances of $142,900 and
$85,800, respectively. LeAnne Gilbert and Becky Clarke are to be admitted to the
partnership. Gilbert buys one-fifth of Henry's interest for $31,400 and one-fourth of
Chou's interest for $20,200. Clarke contributes $74,500 cash to the partnership, for
which she is to receive an ownership equity of $74,500.
Required:
A. On December 31, journalize the entries to record the admission of (1)
Gilbert and (2) Clarke. Refer to the Chart of Accounts for exact wording of
account titles.
B. What are the capital balances of each partner after the admission of the
new partners?
Transcribed Image Text:Instructions The capital accounts of Trent Henry and Tim Chou have balances of $142,900 and $85,800, respectively. LeAnne Gilbert and Becky Clarke are to be admitted to the partnership. Gilbert buys one-fifth of Henry's interest for $31,400 and one-fourth of Chou's interest for $20,200. Clarke contributes $74,500 cash to the partnership, for which she is to receive an ownership equity of $74,500. Required: A. On December 31, journalize the entries to record the admission of (1) Gilbert and (2) Clarke. Refer to the Chart of Accounts for exact wording of account titles. B. What are the capital balances of each partner after the admission of the new partners?
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