The Prince-Robbins partnership has the following capital account balances on

The Prince-Robbins partnership has the following capital account balances on January 1, 2015:
Prince, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $70,000
Robbins, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000
Prince is allocated 80 percent of all profits and losses with the remaining 20 percent assigned to Robbins after interest of 10 percent is given to each partner based on beginning capital balances.
On January 2, 2015, Jeffrey invests $37,000 cash for a 20 percent interest in the partnership. This transaction is recorded by the goodwill method. After this transaction, 10 percent interest is still to go to each partner. Profits and losses will then be split as follows: Prince (50 percent), Robbins (30 percent), and Jeffrey (20 percent). In 2015, the partnership reports a net income of $15,000.
a. Prepare the journal entry to record Jeffrey’s entrance into the partnership on January 2, 2015.
b. Determine the allocation of income at the end of 2015.
Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of...
Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...

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