Question: Statement I : When a partner sells an interest to a new partner at an amount that exceeds the carrying amount of the equity sold,

Statement I : When a partner sells an interest to a new partner at an amount that exceeds the carrying amount of the equity sold, the difference is recognized as a personal gain of the selling partner from the transaction. Statement II : The amount of net assets invested of a new partner into an existing partnership is not always equal to the amount credited to his capital account.

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