Question

Stein agrees to pay Choi and Amal $10,000 each for a one-third (33 1/3%) interest in the Choi and Amal partnership. Immediately prior to Stein’s admission, each partner had a $30,000 capital balance. Prepare the journal entry to record Stein's purchase of the partners' interest.

Answer 1

Answer:

Journal entry to record Stein's purchase of the partners' interest.

                                                 Dr.                                    Cr

Cash                                      $10,000

Stein Capital                                                                 $10,000

Explanation:

Admission of new partner in the partnership will not effect the balance of other partners. It will effect the percentage share between the partners only