When an existing partnership that has goodwill admits a new partner, the end result on the new partner's capital account will be the same under both the bonus method and the recording the goodwill method, regardless of whether the agreed-upon value of the goodwill is eventually realized.

Question

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The bonus method and the recording the goodwill method both result in the same ending capital account balance for the new partner, regardless of whether the agreed-upon value of the goodwill is eventually realized. This is because the bonus method allocates the goodwill to the existing partners, while the recording the goodwill method allocates it to the new partner.

When an Existing Partnership That Has Goodwill Admits a New