Solution-Prepare the entry to record the formation of the

Prepare the entry to record the formation of the partnership

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Reference no: EM132003885

Question - On January 1, 2014, Jackson and Kendall formed a partnership. Jackson, who has many years of experience in this line of business, contributed $100,000 in cash. Kendall contributed assets that have the following book values and fair market values:

	Book Value	Market Value
Merchandise	$15,000	$25,000
Building	40,000	150,000
Equipment	60,000	85,000

The partnership assumed a mortgage of $40,000 on the Building.

Prepare the entry to record the formation of the partnership, under the following methods:

a. Capital accounts are set to equal net assets invested

b. The partners have equal interest in the initial total partnership capital, and the bonus method is used.

c. The partners have equal interest in the initial total partnership capital, and the goodwill method is used.

Reference no: EM132003885

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Prepare the entry to record the formation of the partnership

Reference no: EM132003885

Reference no: EM132003885

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