Conley and Liu Allow Lepley to Purchase a 25% Interest

question 89

Essay

Conley and Liu allow Lepley to purchase a 25% interest in their partnership for $35,000 cash. Lepley has exceptional talents that will enhance the partnership. Conley's and Liu's capital account balances are $55,000 each. The partners have agreed to share income or loss equally. Prepare the general journal entry to record the admission of Lepley to the partnership.

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Definitions:

Implied Authority

Authority of an agent that is not explicitly stated but inferred from the agent's actions or the circumstances.

Hire and Fire

The ability or authority of an employer to recruit new employees and, if necessary, terminate their employment.

RUPA

The Revised Uniform Partnership Act is a set of laws intended to govern partnerships and their operations in the United States.

Statement of Partnership Authority

A document that delineates the extent of a partner's ability to make decisions and bind the partnership in contractual agreements.