Caroline Meeks and Charlie Fox Decide to Form a Partnership

question 110

Essay

Caroline Meeks and Charlie Fox decide to form a partnership on August 1.Meeks invests the following assets and liabilities in the new partnership: The note payable is associated with the building and the partnership will assume responsibility for the loan.Fox invested $100,000 in cash and $95,000 in equipment in the new partnership.Prepare the journal entries to record the two partners' original investments in the new partnership.

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Definitions:

Indirect NCI

An accounting term referring to the portion of equity in a subsidiary not directly attributable to the parent company, calculated on a proportional basis.

Ownership Interest

A stake or share in an asset or entity, giving the holder a claim to a portion of its equity or assets and possibly a share in its profits.

Limited

A form of corporate structure whereby the shareholders' liability is limited to the capital they have invested in the company.

Consolidation Adjustments

Adjustments made to combine the financial statements of parent and subsidiary companies into a single set of financial statements.