Donna Leeds and Ann Reeves have capital accounts of $480,000 and $420,000, respectively. Jeff Evans and Pete Patton are to join the partnership. Evans invests $450,000 in the partnership for which he receives a capital credit of $450,000. Patton purchases a one-half interest from Leeds for $300,000 and a one-fourth interest from Reeves for $90,000.
Instructions
(a) Prepare the journal entries to record the admission of Evans and Patton to the partnership.
(b) Determine the capital balances of the partners after the admission of Evans and Patton.

Question

Quizplus · Accepted Answer

The Answer of Donna Leeds and Ann Reeves have capital accounts of $480,000 and $420,000, respectively. Jeff Evans and Pete Patton are to join the partnership. Evans invests $450,000 in the partnership for which he receives a capital credit of $450,000. Patton purchases a one-half interest from Leeds for $300,000 and a one-fourth interest from Reeves for $90,000.
Instructions
(a) Prepare the journal entries to record the admission of Evans and Patton to the partnership.
(b) Determine the capital balances of the partners after the admission of Evans and Patton.

Donna Leeds and Ann Reeves Have Capital Accounts of $480,000