Question

Meir, Benson, and Lau are partners and share income and loss in a 1:4:5 ratio (in percents: Meir, 10%; Benson, 40%; and Lau, 50%). The partnership's capital balances are as follows: Meir, $38,000; Benson, $159,000; and Lau, $203,000. Benson decides to withdraw from the partnership.

2. Assume that Benson does not retire from the partnership described in Part 1. Instead, Rhode is admitted to the partnership on February 1 with a 25% equity. Prepare journal entries to record Rhode’s entry into the partnership under each separate assumption: Rhode invests (a) $133,333; (b) $97,333; and (c) $174,666. .

Record the admission of Rhode with an investment of $97,333 for a 25% interest in the equity.

Record the admission of Rhode with an investment of $174,666 for a 25% interest in the equity.

Answer 1

Please find below table useful to compute desired results: -

End results would be as follows: -