Floyd and Merriam start a partnership business on June 12, 2019. Their capital account balances as of December 31, 2020 stood as follows: They agreed to admit Ramelow into the business for a one-fifth interest in the new partnership. Ramelow contributes $27,000 cash in exchange for the partnership interest. Assume that Floyd and Merriam shared profits and losses in a 3:1 ratio before the admission of Ramelow. Which of the following is the correct journal entry to record the above admission?

Question

Floyd and Merriam start a partnership business on June 12, 2019. Their capital account balances as of December 31, 2020 stood as follows:  They agreed to admit Ramelow into the business for a one-fifth interest in the new partnership. Ramelow contributes $27,000 cash in exchange for the partnership interest. Assume that Floyd and Merriam shared profits and losses in a 3:1 ratio before the admission of Ramelow. Which of the following is the correct journal entry to record the above admission?

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The Answer of Floyd and Merriam start a partnership business on June 12, 2019. Their capital account balances as of December 31, 2020 stood as follows:  They agreed to admit Ramelow into the business for a one-fifth interest in the new partnership. Ramelow contributes $27,000 cash in exchange for the partnership interest. Assume that Floyd and Merriam shared profits and losses in a 3:1 ratio before the admission of Ramelow. Which of the following is the correct journal entry to record the above admission?

Floyd and Merriam Start a Partnership Business on June 12