Question
In: Accounting
John and Bart decide to form a partnership. John invests $250,000 cash and accounts receivable of...
John and Bart decide to form a partnership. John invests $250,000 cash and accounts receivable of $200,000 less allowance for doubtful accounts of $20,000. Bart contributes $150,000 cash. accounts receivable of $25,000 less allowance for doubtful account of $3,000 , and equipment having a $60,000 book value. It is agreed that the allowance account should be $25,000 for the accounts receivable contributed by John, and $4,000 for the accounts receivable by Bart. The fair market value of the equipment is $75,000 at the date of transfer to the partnership.
Instructions:
Prepare the necessary journal entry to record the formation of the partnership.
Please explain to me how you got the answer as well i'm a little confused. Thank you.
Solutions
Expert Solution
Here is the general entry for the above transactions: -
the results would be as follows: -
Just put the given amount in given columns and the difference would be transferred to capital accounts.
ekkarill92 answered 1 year agoRelated Solutions
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