Accounting Question - Admission of a New Partner
Adam Jones is admitted to a partnership. Prior to his admission, the partnership books show Sean Graham's capital balance at $100,000 and Kelly Ott's capital balance at $60,000. Calculate each partner's equity on the books of the new partnership under the following plans:
1) Jones pays $90,000 for Ott's equity. Jones payment goes directly to Ott.
2) Jones invests $40,000 to acquire a one-fifth interest in the partnership.
3) Jones invests $60,000 to acquire a one-fifth interest in the partnership.
Please could you help me with this question? Thanks.