27. X and Y are partners sharing profits and losses equally. They admit Z for 1/4th share by paying * 5000 out of his share of * 9,000 of goodwill. Goodwill already appears at 30.000 Give Journal entries to record the above transactions.
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Answer: Premium for goodwill is the additional amount brought in by the incoming partner to compensate the existing partners for their sacrifice in the profits of the firm. Since, Z acquires his entire share from Y, only Y is to be compensated for the loss and it is not to be distributed equally among the partners. Hence, the entire amount of premium is credited to Y's Capital account.
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