Z Has Bought B's Interest in the A&B Partnership for a $60,000

question 105

Short Answer

Z has bought B's interest in the A&B Partnership for a $60,000 direct payment to B. The capital balances before the sale were $24,000 and $36,000, respectively. The entry to record the purchase of interest in partnership is:

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Definitions:

Interest Rate Volatility

The extent to which interest rates fluctuate over a particular period of time.

Borrowing Costs

Expenses incurred by an entity for borrowing funds, including interest, fees, and other charges associated with the issuance of debt.

Option Contract

A financial derivative that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at an agreed-upon price within a certain period of time.

Futures Contract

A standardized legal agreement to buy or sell something at a predetermined price at a specified time in the future, typically traded on a futures exchange.