Response to the following problem:
Good, Hood, and Food are partners, sharing profits equally. They decide to admit Mood for an equal partnership (25%). The balances of the partners' capital accounts are:
Good, capital $30,000
Hood, capital 26,000
Food, capital 19,000
75,000
Required: Prepare journal entries to record admission of Mood, using the bonus method:
1. assuming the bonus is paid to the new partner; Mood invests $15,000 cash;
2. assuming the bonus is paid to existing partners; Mood invests $45,000 cash; the remaining partners benefit equally from the bonus.