The capital accounts of Kris Perry and Melvin Newman have balances of $100,000 and $90,000, respectively. Paul Lester and Steve Hurd are to be admitted to the partnership. Lester buys one-fifth of Perry's interest for $30,000 and one-fourth of Newman's interest for $15,000. Hurd contributes $40,000 cash to the partnership, for which he is to receive an ownership equity of $40,000.
a. Journalize the entries to record the admission of
(1) Lester
(2) Hurd.
b. What are the capital balances of each partner after the admission of the new partners?