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26 February, 08:26

Admitting New Partners Myles Etter and Crystal Santori are partners who share in the income equally and have capital balances of $249,000 and $105,000, respectively. Etter, with the consent of Santori, sells one-third of her interest to Lonnie Davis. What entry is required by the partnership if the sales price is $70,000?

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  1. 26 February, 09:20
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    Etter capital $83,000

    Lonnie Davis capital $83,000

    Explanation:

    Data provided in the question:

    Capital balance of Myles Etter = $249,000

    Capital balance of Crystal Santori = $105,000

    Amount of interest sold by the Etter to Lonnie Davis = one-third

    Sales price = $70,000

    Now,

    Required entry will be as follows

    Etter capital $83,000

    Lonnie Davis capital $83,000

    Here,

    the cash will be directly received by the Etter not by the partnership

    Hence,

    It will have not effect on the entry.
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