In the JK partnership,Jacob's capital is $140,000,and Katy's is $40,000.They share income in a 3:2 ratio,respectively.They decide to admit Erin to the partnership.Each of the following questions is independent of the others.
-Refer to the information provided above.Assume that Erin invests $40,000 for a one-fifth interest.Goodwill is to be recorded.The journal entry to record Erin's admission into the partnership will include:

Question

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Erin invests $40,000 for a one-fifth interest, implying the total partnership value is $200,000 ($40,000 * 5). The existing capital is $180,000 ($140,000 + $40,000), so goodwill of $20,000 is implied. Erin's capital account should reflect her share of the partnership, which is $45,000 ($200,000 * 1/5).

In the JK Partnership,Jacob's Capital Is $140,000,and Katy's Is $40,000