In admitting a new partner, where the company chooses to use the purchase of an interest method, the capital interest of the new partner is obtained from the current partners and both the total assets and total capital are increased.

Question

Quizplus · Accepted Answer

In the purchase of an interest method, the new partner buys a portion of the existing partners' capital, so the total assets and total capital remain unchanged.

In Admitting a New Partner, Where the Company Chooses to Use