Pike, Quinn, and Reed are considering adding Shipp as a new partner. On March 31 of the current year, the capital accounts of the three existing partners and their shares of profits and losses are as follows:

Requirements

Journalize the admission of Shipp as a partner on March 31 for each of the following independent situations:

1. Shipp pays Reed \(\$ 200,000\) cash to purchase Reed's interest in the partnership.

2. Shipp invests \(\$ 100,000\) in the partnership, acquiring a one-fourth interest in the business.

3. Shipp invests \(\$ 80,000\) in the partnership, acquiring a one-fourth interest in the business. 

Transcribed Image Text:

Pike.......... Quinn...... Reed............ Capital Profit-and-Loss % $ 50,000 20% 100,000 30% 150,000 50%