Accountancy, asked by pushpanandhinikumare, 10 months ago

journal entres of admission of partners

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Answered by Mani2134R
1

Investment at book value journal entry

The journal entry to reflect the admission of a new partner is as follows. Cash increases by 16,250 as the new partner invests in the partnership. Since the investment was made at book value the capital account of the new partner is also credited with the amount

Admission of a New Partner – Investment at Book Value

Providing the amount invested by the new partner is equal to the book value of the percentage of the partnership purchased, the new partners capital account is simply credited with the amount invested.

Suppose for example a partnership has two existing partners A and B with total combined capital of 65,000. The admission of a new partner C is agreed on the basis that C provides additional capital in return for a 20% share.

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