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The Distance Plus partnership has the following capital balances at the beginning of the current year:
Tiger (50% of profits and losses) $85,000
Phil (30%) 55,000
Ernie (20%) 70,000
Each of the following questions should be viewed independently.
Problem 1: If Sergio invests $90,000 in cash in the business for a 25 percent interest, what journal entry is recorded? Assume that the bonus method is used.
Problem 2: If Sergio invests $64,000 in cash in the business for a 25 percent interest, what journal entry is recorded? Assume that the bonus method is used.
Problem 3: If Sergio invests $72,000 in cash in the business for a 25 percent interest, what journal entry is recorded? Assume that the goodwill method is used.
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