Connie Knox and Andrea Cardoza Have Capital Accounts of $360,000

question 144

Essay

Connie Knox and Andrea Cardoza have capital accounts of $360,000 and $280,000, respectively. Bob Lee and Mike McClure are to join the partnership. Lee invests $55,000 in the partnership for which he receives a capital credit of $55,000. McClure purchases a one-half interest from Knox for $230,000 and a one-fourth interest from Cardoza for $100,000.
Instructions
a. Prepare the journal entries to record the admission of Lee and McClure to the partnership.
b. Determine the capital balances of the partners after the admission of Lee and McClure.

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Definitions:

Implement

To put a decision, plan, agreement, etc., into effect.

Effective Strategic Problem Solvers

Individuals or teams skilled in identifying, analyzing, and resolving issues strategically to achieve long-term goals.

Mutually Beneficial Agreements

Contracts or arrangements that provide favorable outcomes for all parties involved.

Prospecting

The process of identifying potential customers or clients for a business's products or services, often involving research and communication efforts.