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N. Flanders and R. Lovejoy join forces to open a religious bookstore. Flanders' Capital amounts to $36 000 and Lovejoy's totals $54 000 and they share profits and losses in the following ratio: 50% to Flanders and 50% to Lovejoy. They decide to take on J. Hibbert as a new partner.
Problem 1: Prepare the journal entry to record the admission of Hibbert under each of the following independent situations:
a) Hibbert buys Lovejoy's equity in the business for $52 000.b) Hibbert invests $42 000 and receives a one-third interest in the partnership.c) Hibbert invests $31 000 and receives a 25% interest in the partnership.
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