The Distance Plus partnership has the following capital balancesat the beginning of the current year:
Tiger (50% of profits and losses)
$
70,000
Phil(40%)
40,000
Ernie (10%)
55,000
the following questions should be viewed independently.
1) If Sergio invests $60,000 in cash in the business for a 20percent interest, what journal entry is recorded? Assume that thegoodwill method is used. (If no entry is required for atransaction/event, select “No journal entry required” in the firstaccount field.)
a) Record the entry for goodwill allocation,during the admission of a new partner.
b) Record the investment made by the new partner in thebusiness.
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