Nick Is Admitted to an Existing Partnership by Investing Cash

question 151

Multiple Choice

Nick is admitted to an existing partnership by investing cash. Nick agrees to pay a bonus for his ownership interest because of the past success of the partnership. When Nick's investment in the partnership is recorded,

• A) his capital account will be credited for more than the cash he invested
• B) his capital account will be credited for the amount of cash he invested
• C) a bonus will be credited for the amount of cash he invested
• D) a bonus will be distributed to the old partners' capital accounts

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