J. Witt and K. Torres are partners in Whole Earth Consultants. Witt and Torres share income equally. L. Jenkins will be admitted to the partnership. Prior to the admission, equipment was revalued downward by $12,000. The capital balances of each partner are $106,000 and $141,000, respectively, prior to the revaluation.
a. Provide the journal entry for the asset revaluation.
b. Provide the journal entry for Jenkins’ admission under the following independent situations:
1. Jenkins purchased a 20% interest for $45,000.
2. Jenkins purchased a 30% interest for $135,000.