Question - The Distance Plus Partnership has the following capital balances at the beginning of the current year:
Tiger (40% of profits and losses) $90,000
Phil (30%) $60,000
Ernie (30%) $75,000
a. If Sergio invests $70,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used.
b. If sergio invests in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used.
c. If Sergio invests $60,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the goodwill method is used.