Reed, Sharp, and Tucker Were Partners with Capital Account Balances

question 10

Essay

Reed, Sharp, and Tucker were partners with capital account balances of $80,000, $100,000, and $70,000, respectively.They agreed to admit Upton to the partnership.Upton purchased 30% of each partner's interest, with payments directly to Reed, Sharp, and Tucker of $32,000, $40,000, and $28,000, respectively.Before the admission of Upton, the profit and loss sharing ratio was 2:3:2.The partners agreed to use the book value method to account for the admission of Upton to the partnership.
Required:
Prepare the journal entry to record the admission of Upton to the partnership.

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Definitions:

Specimen

A sample or part taken from a living organism or the environment for the purpose of scientific examination.

Optical Instrument

An optical instrument is a device designed to manipulate light in order to view or analyze objects with enhanced detail.

Refraction

The bending of light by the cornea, lens, and eye fluids to focus light onto the retina.