Refer to the data presented in exercise 8.2. Assume further that Pike and Smith agree that their
Question:
Refer to the data presented in exercise 8.2. Assume further that Pike and Smith agree that their opening capital balances in the new partnership should be the same and set the amount at $90 000.
Data from in Exercise 8.2
Tammie Pike and Gail Smith agree to combine their businesses and form a partnership. The fair value and the carrying amount of the assets contributed by each partner and the liabilities assumed by the partnership are shown below:
Required
Prepare separate general journal entries to record the initial investment of each partner, assuming assets are recorded by the business to reflect their purchase price, and the arrangement is GST-free.
Step by Step Answer:
Financial Accounting
ISBN: 9781118608203
9th Edition
Authors: John Hoggett, Lew Edwards, John Medlin, Keryn Chalmers, Jodie Maxfield, Andreas Hellmann, Claire Beattie