Prepare journal entries for the relevant transactions

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Question - Fernando and Jose are partners with capital balances of P30,000 and P70,000, respectively. Fernando has a 30% interest in profits and losses. All assets of the partnership are at fair market value except equipment with book value of P300,000 and fair market value of P320,000. At this time, the partnership has decided to admit Rosa and Linda as new partners. Rosa contributes cash of P55,000 for a 20% interest in capital and a 30% interest in profits and losses. Linda contributes cash of P10,000 and an equipment with a fair market value of P50,000 for a 25% interest in capital and a 35% interest in profits and losses. Linda is also bringing special expertise and clients contact into the new partnership. The partnership will use bonus method to account for the capital balances upon Rosa and Linda's admission.

Required -

1. Schedule of capital balances for the admission of Rosa and Linda.

2. Prepare journal entries for the relevant transactions.

Reference no: EM132857903

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