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The Distance Plus Partnership has the following capital balances at the beginning of the current year.
The Distance Plus Partnership has the following capital balances at the beginning of the current year.
Tiger (40% of profits and losses) $80,000
Phil (40%) 50,000
Ernie (20%) 65,000
Each of the following questions should be viewed independently:
a. If Sergio invests $100,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used . (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
b. If Sergio invest $75,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field).
c. If Sergio invest $90,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume the goodwill method is used. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field)
