In the AD Partnership,Allen's Capital Is $140,000 and Daniel's Is

question 26

Multiple Choice

In the AD partnership,Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio,respectively.They decide to admit David to the partnership.Each of the following questions is independent of the others.
-Refer to the information provided above.Assume that David invests $50,000 for a one-fourth interest.Goodwill is to be recorded.The journal to record David's admission into the partnership will include:

• A)a credit to cash for $50,000.
• B)a debit to goodwill for $7,500.
• C)a credit to David,Capital for $60,000.
• D)a credit to David,Capital for $50,000.

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Definitions:

Par Value

The nominal or face value of a bond, share of stock, or other financial instrument.

Maturity

The final payment date of a loan or other financial instrument, at which point the principal (and all remaining interest) is due to be paid.

Annual Coupon

The total interest to be paid on a bond each year, divided between regular payment periods.

Bonds

Bonds are fixed-income securities that represent a loan made by an investor to a borrower, typically corporate or governmental, where the borrower agrees to pay back the principal plus interest at a specified date.