Question

Meir, Benson, and Lau are partners and share income and loss in a 1:4:5 ratio. 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, and the partners agree not to have the assets revalued upon Benson's retirement. 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 of the following separate assumptions: Rhode invests (a) $133,333; (b) $97,333; and (c) $174,666. (Do not round your intermediate calculations.)

Answer 1

Req
S.no.	Accounts title and explanations				Debit $	Credit $
case a.	Cash Account dr.				133,333
	Rhode's capital					133,333
Note:
Capital before addmission (38000+159000+203000)					400000
Add: Rhode capital					133333
Total capital					533,333
Rhode's share of capital					133333.3
No Bonus
S.no.	Accounts title and explanations				Debit $	Credit $
case b.	Cash Account dr.				97,333
	Meir Capital Dr.				2700
	Benson Capital Dr.				10800
	lau capital Dr.				13500
	Rhode' capital					124333
Note:
Capital before addmission (38000+159000+203000)					400000
Add: Rhode capital					97333
Total capital					497,333
Rhode's share of capital					124333
Bonus to Rhode					27000
S.no.	Accounts title and explanations				Debit $	Credit $
case c.	Cash Account dr.				174,666
	Rhode's capital					143,666
	Meir capital					3,100
	Benson Capital					12,400
	Lau capital					16,500
Note:
Capital before addmission (38000+159000+203000)					400000
Add: Rhode capital					174666
Total capital					574,666
Rhode's share of capital					143666
Bonus to other partners					31000