In ABC Co., the capital balances of the partners are A. Ali $30,000; S. Babson $25,000; and

Question:

In ABC Co., the capital balances of the partners are A. Ali $30,000; S. Babson $25,000; and K. Carter $36,000. The partners share profit equally. On June 9 of the current year, D. Dutton is admitted to the partnership by purchasing one-half of K. Carter's interest for $20,000.

(a) Journalize the admission of Dutton on June 9.

(b) How would the entry change if Dutton had paid $20,000 to purchase one-half of A. Ali's interest instead of K. Carter's interest?

Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...