Question

J. Gladwin has a capital balance of $106,000 and R. Selleck has a capital balance of $94,000 in their partnership as of September 30. On October 1, Gladwin sells one-half of her partnership interest to R. Dennis for $60,000 cash. Selleck agrees to accept Dennis as a new partner. Prepare the October 1 journal entry for the partnership.

Answer 1

Answer:

J. Gladwin has a capital balance = $106,000

R. Selleck has a capital balance = $94,000

The Journal entry is as follows:

On October 1,

J. Gladwin Capital A/c Dr. $53,000

To R. , Capital $53,000

(To record admission of R.)

Working Notes:

J. Gladwin Capital:

= Capital balance of J. Gladwin ÷ 2

= $106,000 ÷ 2

= $53,000

Therefore, the J. Gladwin capital is $53,000.