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Recording Investments of Partners On May 1 Jason Pua and Roy Nelson formed the
Chapter 27, Problem 27-6(choose chapter or problem)
Recording Investments of Partners
On May 1 Jason Pua and Roy Nelson formed the partnership called JR Landscaping. Jason contributed $8,100 cash and all of his landscaping equipment. Jason had purchased the equipment for $2,500 last year. The market value of this equipment is now $1,800. Roy contributed $1,000 cash and his truck to the partnership. The truck currently has a market value of $5,600.
Instructions Prepare the journal entries required to record the investment that each partner contributed in creating the partnership. Use page 1 of the general journal in your working papers. The source document for this assignment is Memorandum 1.
Analyze Compare the balance of Jason Pua’s capital account with the capital account of Roy Nelson.
Questions & Answers
QUESTION:
Recording Investments of Partners
On May 1 Jason Pua and Roy Nelson formed the partnership called JR Landscaping. Jason contributed $8,100 cash and all of his landscaping equipment. Jason had purchased the equipment for $2,500 last year. The market value of this equipment is now $1,800. Roy contributed $1,000 cash and his truck to the partnership. The truck currently has a market value of $5,600.
Instructions Prepare the journal entries required to record the investment that each partner contributed in creating the partnership. Use page 1 of the general journal in your working papers. The source document for this assignment is Memorandum 1.
Analyze Compare the balance of Jason Pua’s capital account with the capital account of Roy Nelson.
ANSWER:Step 1 of 3
A business organization where two or more individuals contribute the capital is known as a partnership. Under such a business organization, the profit and loss from operations are distributed among the contributors based on mutual consent or capital.