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Question - Leo, Simpson and Wesley are partners with the following capital balances and profit and loss percentages:
Leo: $120,000 (60%)
Simpson: $ 60,000 (20%)
Wesley: $ 40,000 (20%)
Simpson wishes to withdraw from the partnership and it is agreed that Simpson will receive his current capital balance plus his share of any valuation adjustments associated with the fair value of the whole business being greater than book value. Assume that the fair value of the whole business is $300,000 greater than the book value. The bonus method is being used
Show the journal entry required to record the withdrawal of Simpson.
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