Arun and Margot want to admit Tammy as a third partner for their partnership. Their capital balances prior to Tammy’s admission are $50,000 each. Prepare a schedule showing how the bonus should be divided among the three, assuming the profit or loss agreement will be 1:3 once Tammy has been admitted and her contribution is:
A. $20,000
B. $80,000
C. $50,000.
In addition, show the resulting journal entries to each of the three partners’ capital accounts.