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Partners Gonzaga and Magada have capital account balances of P30,000 and P20,000, respectively, and they share profits and losses in a 3:1 ratio.
Problem a: How would you prepare the journal entries to record the admission of Ortiz under each of the following conditions:
1. Ortiz invested P30,000 for a one-fourth interest in net assets; the total partnership capital after Ortiz's admission will be P80,000.
2. Ortiz invested P30,000, of which P10,000 is a bonus to Gonzaga and Magada. In conjuction with the admission of Ortiz, the carrying amount of the inventories is increased by P16,000. Ortiz's capital account is credited for P20,000.
Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have over this longer real rate?
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