The capital balances for the partnership of Diaz, Isidro, and Nelson are as follows:

CapitalDiaz	$1,000,000
CapitalIsidro	800,000
CapitalNelson	500,000

The partners share income in a1:3:6 ratio. Nelson decides to retire. Diaz and Isidro continue the partnership, sharing income in a 1:3 ratio.

Required

Prepare the journal entry or entries to record the retirement of Nelson in each of the following scenarios:

a. Diaz and Isidro use their personal assets to buy Nelson's interest for $600,000.

Description	Debit	Credit
Capital Nelson	Answer	Answer
Capital Diaz	Answer	Answer
Capital-Isidro	Answer	Answer

b. The partners agree to pay Nelson $650,000 of partnership cash. The bonus method is used.

Description	Debit	Credit
Capital-Diaz	Answer	Answer
Capital Isidro	Answer	Answer
Capital Nelson	Answer	Answer
To record retirement bonus to Nelson.
Capital Nelson	Answer	Answer
Cash	Answer	Answer
To record retirement payment to Nelson.

c. Same as b., but the partial goodwill approach is used.

Description	Debit	Credit
Goodwill	Answer	Answer
Capital Nelson	Answer	Answer
To record partial goodwill.
Capital Nelson	Answer	Answer
Cash	Answer	Answer
To record retirement payment to Nelson.

d. Same as b., but the total goodwill approach is used.

Description	Debit	Credit
Goodwill	Answer	Answer
Capital-Diaz	Answer	Answer
Capital-Isidro	Answer	Answer
Capital Nelson	Answer	Answer
To record total goodwill.
Capital Nelson	Answer	Answer
Cash	Answer	Answer
To record retirement payment to Nelson.

e. The partners agree to pay Nelson $440,000 of partnership cash. The difference is attributed to overvalued plant and equipment, and the total goodwill approach is used.

Description	Debit	Credit
Capital-Diaz	Answer	Answer
Capital-Isidro	Answer	Answer
Capital Nelson	Answer	Answer
Plant and equipment	Answer	Answer
To record difference attributed to overvalued land.
Capital Nelson	Answer	Answer
Cash	Answer	Answer
To record retirement payment to Nelson.