The Distance Plus partnership has the following capital balances at the beginning of the current year along with respective profit and loss percentages: Tiger (50%) Phil (20%) Ernie (30%) $ 135,000 105,000 120,000 Each of the following questions should be viewed independently. Required: a. If Sergio invests $150,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used. b. If Sergio invests $80,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used. c. If Sergio invests $100,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the goodwill method is used.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The Distance Plus partnership has the following capital balances at the beginning of the current year along with respective profit and
loss percentages:
Tiger (50%)
Phil (20%)
Ernie (30%)
$ 135,000
105,000
120,000
Each of the following questions should be viewed independently.
Required:
a. If Sergio invests $150,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus
method is used.
b. If Sergio invests $80,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus
method is used.
c. If Sergio invests $100,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the
goodwill method is used.
Complete this question by entering your answers in the tabs below.
Required A Required B
Required C
If Sergio invests $150,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus
method is used.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
View transaction list
Transcribed Image Text:The Distance Plus partnership has the following capital balances at the beginning of the current year along with respective profit and loss percentages: Tiger (50%) Phil (20%) Ernie (30%) $ 135,000 105,000 120,000 Each of the following questions should be viewed independently. Required: a. If Sergio invests $150,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used. b. If Sergio invests $80,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used. c. If Sergio invests $100,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the goodwill method is used. Complete this question by entering your answers in the tabs below. Required A Required B Required C If Sergio invests $150,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list
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