Reference no: EM132621558

Phoenix and Tim Tucson are partners in electrical repair business. Their respective capital balances are P 90,000 and P 50,000, and they share profits and losses equally. Because the partners are confronted with personal financial problems, they decided to admit a new partner to the partnership. After an extensive interviewing process they elect to admit Don Dallas into the partnership.

Required:

Problem a: Prepare the journal entry to record the admission of Don Dallas into the Partnership under each of the following conditions:

1. Don acquires ¼ of Phoenix capital interest by paying P 30,000 directly to him.

2. Don acquires 1/5 of each partners' capital interest. Phoenix receives P 25,000 and Tim receives P 15,000 directly from Don.

3. Don acquires 1/5 capital interest for a P 60,000 cash investment in the partnership. The total capital after the admission is to be P 200,000.

4. Don invest P 40,000 for a 1/5 interest in partnership capital. Implicit goodwill is to be recorded.