When a new partner is admitted by making an investment of assets in the partnership and the new partner has to pay a premium for admission, a bonus is divided among the old partners' capital accounts.

Question

Quizplus · Accepted Answer

This statement is true as the premium paid by the new partner increases the total value of the partnership, which results in an increase in the capital accounts of the old partners. The bonus is usually a percentage of the premium paid, which is divided among the old partners' capital accounts.

When a New Partner Is Admitted by Making an Investment