Hancock, McCabe, and Johnson are considering adding Ken Sacchetti as a new partner. On July 31 of the current year, the capital accounts of the three existing partners and their shares of profits and losses are as follows:
|
Capital |
Profit and Loss % |
|
|
Hancock |
$ 36,000 |
20% |
|
McCabe |
72,000 |
25% |
|
Johnson |
108,000 |
55% |
Requirements
Journalize the admission of Sacchetti as a partner on July 31 for each of the following independent situations:
1. Sacchetti pays Johnson $144,000 cash to purchase Johnson’s interest in the partnership.
2. Sacchetti invests $72,000 in the partnership, acquiring a 1/4 interest in the business.
3. Sacchetti invests $72,000 in the partnership, acquiring a 1/6 interest in the business.
4. Sacchetti invests $72,000 in the partnership, acquiring a 1/3 interest in the business.