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Kim Locke and Mary Leigh Coker Have Capital Accounts of $420000

question 83

Essay

Kim Locke and Mary Leigh Coker have capital accounts of $420000 and $480000 respectively. Jeff Doggett and Danny Cambrey are to join the partnership. Doggett invests $425000 in the partnership for which he receives a capital credit of $425000. Cambrey purchases a one-half interest from Locke for $300000 and a one-fourth interest from Coker for $90000.
Instructions
(a) Prepare the journal entries to record the admission of Doggett and Cambrey to the partnership.
(b) Determine the capital balances of the partners after the admission of Doggett and Cambrey.


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