Romel and Jennie share partnership profits and losses at 60% and 40%, respectively. The partners agree to admit IU into the partnership for a 25% interest in capital and earnings. Capital accounts immediately before the admission of IU are: Romel (60%) P 200,000 Jennie (40%) 400,000 Total P 600,000

Required:

1. Prepare the journal entry(s) for the admission of IU to the partnership assuming IU invested P250,000 for the ownership interest. IU paid the money directly to Romel and to Jennie for 30% of each of their respective capital interests. Use Book value Method.

2. Prepare the journal entry(s) for the admission of IU to the partnership assuming IU invested P300,000 for the ownership interest. IU paid the money to the partnership for a 35% interest in capital and earnings. Use the Bonus Method.

Answer rating: 100% (QA)

SOLUTION Book value method Romel Capital 80000 Jennie Capital 16... View the full answer