At April 30, partners’ capital balances in DES Partners are Dexter $44,000, Emley $26,000, and Singh $24,000. The profit-sharing ratio is 5:3:2, respectively. On May 1, DESW Partners is formed by admitting Watson to the firm as a partner with 20% equity. 

Instructions

Journalize the admission of Watson under each of the following independent assumptions. 

a. Watson invests $23,500. 

b. Watson invests $35,000. 

c. Watson invests $10,000.

After joining the partnership, Watson developed concerns over unlimited liability. Watson is now aware that there are partnerships that modify this feature. Explain to Watson these other forms of partnership.