Assume the partnership of Richard, Harry, and William has been in existence for a number...
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Accounting
Assume the partnership of Richard, Harry, and William has been in existence for a number of years. Richard decides to withdraw from the partnership when the partners capital balances are as follows:
Richard: $75,000
Harry: 15,000
William: 25,000
The profit and loss ratios are as follows:
Richard: 45%
Harry: 25%
William: 30%
An appraisal of the business and its property estimates the fair value to be $115,000. Richard has agreed to receive $60,000 in exchange for his partnership interest.
Prepare the journal entry for the payment to Richard in the dissolution of his partnership interest, assuming the bonus method is to be applied.
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