Answer:
Dr Cash 20,000
Dr Account Receivable 45,000
Dr Patent 92,000
Cr Allowance for doubtful debt 3,000
Cr Account payable 14,000
Cr Holly Renfro, Capital 140,000
( to record Renfro’s contribution to the partnership)
Explanation:
The Holly Renfro's contribution of Capital to the partnership is decided as:
Cash + Net value of Account Receivables + Market value of patent - Account payable = 20,000 + 42,000 + 92,000 - 14,000 = $140,000
which is recorded in the partnership as:
Dr Cash 20,000 to show the increase in Cash account of
Dr Account Receivable 45,000; Cr Allowance for doubtful debt 3,000. To record net value of Account receivable of 42,000.
Dr Patent 92,000. Patent is recorded at market value to show the accurate amount of contribution to the partnership.
Cr Account payable 14,000 to show amount of liabilities the partnership assumed from Holly Renfro.
Cr Holly Renfro, Capital 140,000 to show net capital contribution of Holly Renfro to the partnership.
