Response to the following problem:
Perry, Thomas, and Johnson are partners in Thomas and Company. Their capital balances and profit and loss sharing ratios on June 30, Year 4, are as follows:
Perry $216,000 4
Thomas 300,000 5
Johnson 159,000 1
Required:
PART A
On July 1, Carnie invests $127,000 for a one-fifth interest in capital.
Prepare journal entries for all of the possible methods available to record the admission of Carnie.
PART B
Assume instead that on July 1, Carnie invests $127,000 for a one-eighth interest in capital.
Prepare journal entries for all of the possible methods available to record the admissionof Carnie.