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The Distance Plus Partnership has the following capital balances at the beginning of the current year.
Tiger (40% of profits and losses) $80,000
Phil (40%) 50,000
Ernie (20%) 65,000
Each of the following questions should be viewed independently:
a. If Sergio invests $100,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used . (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.
b. If Sergio invest $75,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field).
c. If Sergio invest $90,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume the goodwill method is used. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field)
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