Bobbi and Stuart are partners. The partnership capital of Bobbi is $40,000 and that of Stuart is $70,000. Bobbi sells his interest in the partnership to John for $50,000. The journal entry to record the admission of John as a new partner would include a credit to

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John's capital account should be credited for $40,000, which is the amount of Bobbi's interest in the partnership that John purchased. The additional $10,000 paid by John is a personal transaction between Bobbi and John and does not affect the partnership's books.

Bobbi and Stuart Are Partners