Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac

Exercise 39

ARevaluing and contributing assets to a partnership
Aasif Safar purchased one-half of Michael Thorton's interest in the Vale and Thorton partnership for $34,000. Prior to the investment, land was revalued to a market value of $150,000 from a book value of $80,000. Tony Vale and Michael Thorton share net income equally. Thorton had a capital balance of $28,000 prior to these transactions.
a. Provide the journal entry for the revaluation of land.
b. Provide the journal entry to admit Safar.
BRevaluing and contributing assets to a partnership
Demarco Lee invested $60,000 in the Camden and Sayler partnership for ownership equity of $60,000. Prior to the investment, equipment was revalued to a market value of $39,000 from a book value of $30,000. Kevin Camden and Chloe Sayler share net income in a 2:1 ratio.
a. Provide the journal entry for the revaluation of equipment.
b. Provide the journal entry to admit Lee.