Bobbi and Stuart are partners. The partnership capital of Bobbi is $40,000 and Stuart is $70,000. Bobbi sells his interest in the partnership to John for $50,000. The journal entry to record the admission of John as a new partner would includea. a credit to John's capital for $40,000 and a credit to Stuart's capital for $10,000. b. a credit to Stuart's capital for $10,000.

c. a credit John's capital for $50,000. d. a credit to John's capital for $40,000.

Question

Business

Franklin Elliott

4 July, 10:39

Bobbi and Stuart are partners. The partnership capital of Bobbi is $40,000 and Stuart is $70,000. Bobbi sells his interest in the partnership to John for $50,000. The journal entry to record the admission of John as a new partner would includea. a credit to John's capital for $40,000 and a credit to Stuart's capital for $10,000. b. a credit to Stuart's capital for $10,000.

c. a credit John's capital for $50,000. d. a credit to John's capital for $40,000.

+4

Answers (1)

Know the Answer?

Brody Dennis · Answer 1

d. a credit to John's capital for $40,000.

Explanation:

In the question, it is mentioned that the bobby sells his interest in the partnership to John for $50,000 out of which the capital of Bobbi is $40,000 which reflects that the excess of $10,000 is the goodwill payment made by John to Bobbi.

All other information which is given is not relevant. Hence, ignored it

So, the John capital is credited for $40,000 capital