In the AD partnership,Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio,respectively.They decide to admit David to the partnership.Each of the following questions is independent of the others.
-Refer to the information provided above.Assume that David invests $50,000 for a one-fourth interest.Goodwill is to be recorded.The journal to record David's admission into the partnership will include:

Question

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David's investment of $50,000 for a one-fourth interest implies the total partnership value is $200,000 ($50,000 * 4). The existing capital is $180,000 ($140,000 + $40,000), so goodwill of $20,000 is implied. David's capital account should be credited with $60,000 ($50,000 investment + $10,000 share of goodwill).

In the AD Partnership,Allen's Capital Is $140,000 and Daniel's Is