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15 September, 08:29

Gavin invested $40,000 in the Jason and Kelly Partnership for ownership equity of $40,000. Prior to the investment, land was revalued to a market value of $363,000 from a book value of $174,000. Jason and Kelly share net income in a 1:2 ratio. a. Provide the journal entry for the revaluation of land. If an amount box does not require an entry, leave it blank.

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  1. 15 September, 09:03
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    A.

    Dr Land $189,000

    Cr Jason, Capital $63,000

    Cr Kelly, Capital $126,000

    B.

    Dr Cash $40,000

    Cr Gavin, Capital $40,000

    Explanation:

    A.

    Dr Land ($363,000-$174,000) $189,000

    Jason, Capital (1/3*189,000) $63,000

    Kelly, Capital (1/2*189,000) $126,000

    B.

    Dr Cash $40,000

    Cr Gavin, Capital $40,000
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