Kim Locke and Mary Leigh Coker have capital accounts of $420,000 and $480,000, respectively. Jeff Doggett and Danny Cambrey are to join the partnership. Doggett invests $425,000 in the partnership for which he receives a capital credit of $425,000. Cambrey purchases a one-half interest from Locke for $300,000 and a one-fourth interest from Coker for $90,000.
(a)Prepare the journal entries to record the admission of Doggett and Cambrey to the partnership.
(b)Determine the capital balances of the partners after the admission of Doggett and Cambrey.
Daggett, Lamppin, and Pendergast are partners who share profits and losses 50%, 30%, and 20%, respectively. Their capital balances are $150,000, $90,000, and $60,000, respectively.
(a)Assume Sanford joins the partnership by investing $140,000 for a 25% interest with bonuses to the existing partners. Prepare the journal entry to record his investment.
(b)Assume instead that Daggett leaves the partnership. Daggett is paid $170,000 with a bonus to the retiring partner. Prepare the journal entry to record Daggett’s withdrawal.