After the tangible assets have been adjusted to current marketprices, the capital accounts of Brad Paulson and Drew Webster havebalances of $45,000 and $60,000, respectively. Austin Neel is to beadmitted to the partnership, contributing $30,000 cash to thepartnership, for which he is to receive an ownership equity of$35,000. All partners share equally in income. Required: A. OnDecember 31, journalize the entry to record the admission of Neel,who is to receive a bonus of $5,000. Refer to the Chart of Accountsfor exact wording of account titles. B. What are the capitalbalances of each partner after the admission of the new partner? C.Why are tangible assets adjusted to current market prices, prior toadmitting a new partner?
