Foss, Albertson, and Espinosa are partners who share profits and losses 50%, 30%, and 20%, respectively. Their capital balances are $100,000, $60,000, and $40,000, respectively.
(a) Assume Garrett joins the partnership by investing $88,000 for a 25% interest with bonuses to the existing partners. Prepare the journal entry to record his investment.
(b) Assume instead that Foss leaves the partnership. Foss is paid $110,000 with a bonus to the retiring partner. Prepare the journal entry to record Foss’s withdrawal.