2) Carter and Grey are partners in an automobile repair business. Their respective capital balances are...

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2) Carter and Grey are partners in an automobile repair business. Their respective capital balances are $425,000 and $275,000, and they share profits in a 3:2 ratio. Because of growth in their repair business, they decide to admit a new partner. Bush is admitted to the partnership, after which Carter, Grey, and Bush agree to share profits in a 3:2:1 ratio. Required: Prepare the necessary journal entries to record the admission of Bush in each of the following independent situations: A. Bush invests $300,000 for a one-fourth capital interest, but will not accept a capital balance of less than his investment. B. Bush invests $150,000 for a one-fifth capital interest. The partners agree that assets and the firm as a whole should be revalued. C. Bush purchases a 20% capital interest from each partner. Carter receives $100,000 and Grey receives $50,000 directly from Bush. Answer: A. Goodwill Carter, Capital Grey, Capital Cash Bush, Capital B. Cash Goodwill Bush, Capital C. Carter, Capital Grey, Capital Bush, Capital Debit Credit 2) Carter and Grey are partners in an automobile repair business. Their respective capital balances are $425,000 and $275,000, and they share profits in a 3:2 ratio. Because of growth in their repair business, they decide to admit a new partner. Bush is admitted to the partnership, after which Carter, Grey, and Bush agree to share profits in a 3:2:1 ratio. Required: Prepare the necessary journal entries to record the admission of Bush in each of the following independent situations: A. Bush invests $300,000 for a one-fourth capital interest, but will not accept a capital balance of less than his investment. B. Bush invests $150,000 for a one-fifth capital interest. The partners agree that assets and the firm as a whole should be revalued. C. Bush purchases a 20% capital interest from each partner. Carter receives $100,000 and Grey receives $50,000 directly from Bush. Answer: A. Goodwill Carter, Capital Grey, Capital Cash Bush, Capital B. Cash Goodwill Bush, Capital C. Carter, Capital Grey, Capital Bush, Capital Debit Credit