Partnership It is that form of organization which is owned and managed by two or more persons who invest and share the profits and losses according to a pre-determined ratio. Forming a Partnership While forming the partnership, the contribution of assets by partners are debited to the partnership assets account; whereas the liabilities of the partnerships are credited to the partnership’s liabilities account, and the net amount of the investments of partners are credited to the partners’ individual capital account. (a) and (b) To record: The journal entry by the partnership, when the sale price is $60,000 and $80,000.

Question

Admitting New Partners Myles Etter and Crystal Santori are partners who share in the income equally and have capital balances of $210,000 and $88,000, respectively. Etter, with the consent of Santori, sells one-third of his interest to Lonnie Davis. a. What entry is required by the partnership if the sales price is $60,000? If an amount box does not require an entry, leave it blank. Myles Etter, Capital - V Lonnie Davis, Capital Feedback Chack My Work a. The sales price is not a partnership transaction, but a private transaction between the two partners. b. What entry is required by the partnership if the sales price is $80,000? If an amount box does not require an entry, leave it blank. 88 Myles Etter, Capital Lonnie Davis, Capital Feedback Check My Work

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Chapter 12, Problem 12.9EX

To determine

Partnership

It is that form of organization which is owned and managed by two or more persons who invest and share the profits and losses according to a pre-determined ratio.

Forming a Partnership

While forming the partnership, the contribution of assets by partners are debited to the partnership assets account; whereas the liabilities of the partnerships are credited to the partnership’s liabilities account, and the net amount of the investments of partners are credited to the partners’ individual capital account.

(a) and (b)

To record: The journal entry by the partnership, when the sale price is $60,000 and $80,000.

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