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Admission of new partner-Bonus Method Assume that Partners A and B each report a Capital...

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Accounting

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Admission of new partner-Bonus Method Assume that Partners A and B each report a Capital Account of $300,000 Partner C wants to join the partnership as an equal one-third partner. Because the partnership has been very profitable, Partners A and B require Partner C to contribute $600,000 in cash to the partnership in return for a one-third interest. Assume that Partners A and B share profits 60% and 40%, respectively, prior to the admission of Partner C. After admission of Partner C, Partners A and B retain their relative proportion of pro allocation after granting Partner C a 30% profit-allocation interest Use the Bonus Method to record the journal entry on the books of the partnership to reflect the admission of Partner C journal entry on the books of the partnership to reflect the admission of Partner C. Description Debit Credit Capital Account. Partner A Capital Account Partner 400,000

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