on 1st january, 2019 , A and B , sharing profits in the ratio of tow third and one-third respectively agree to admit C into partnership on condition that he pays $30,000 as capital and $90,000 for one-sixth share of goodwill which he acquires equally from A and B. Give necessary journal entries to record these transactions.
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Cash/ Bank A/C Dr 45000
To C's Capital A/C 30000
To Premium For Goodwill A/C 15000
(Being Capital and Premium for goodwill bought)
Premium For Goodwill A/C Dr 15000
To A's Capital A/C 10000
To B's Capital A/C 5000
(Being Premium For Goodwill distributed)
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