Question

prepare journal entries to record the admission of adison for a 20% interest in the equity and a 20% share in any income under independent assumption.
(1) record the admission of adison with an investment of $175,000 for a 20% interest in the equity and a 20% share in any income and loss.
(2) record the admission of adison with an investment of $210,000 for a 20% interest in the equity and a 20% share in any income and loss.
(3) record the admission of adison with an investment of $145,000 for a 20% interest in the equity and a 20% share in any income and loss.
view transaction list
journal entry worksheet
record the admission of adison with an investment of $145,000 for a 20% interest in the equity and a 20% share in any income and loss.
note: enter debits before credits.
transaction general journal debit credit
(3) cash
main. capital
first. capital
adison, capital

Explanation:

Step1: Record cash receipt

Debit Cash for the amount of Addison's investment. So, debit Cash $145,000.

Step2: Calculate Addison's capital

Since Addison is getting a 20% interest in equity, credit Addison, Capital for the amount of the investment. Credit Addison, Capital $145,000. There is no information about existing partners (Main, First) being affected in this basic entry for Addison's admission with this investment, so we leave their capital accounts untouched for this simple - case entry.

Answer:

Transaction	General Journal	Debit	Credit
	Addison, Capital		$145,000