the at partnership was organized several years ago and on 263275

The AT Partnership was organized several years ago, and on January 1, 2011, the partners agree to admit Carmen for a 40 percent interest in capital and earnings. Capital account balances and profit and loss sharing ratios at January 1, 2011, before the admission of Carmen, are as follows:

Aida (50%) ………… $500,000

Thais (50%) …………. 280,000

REQUIRED: Prepare journal entries to record the admission of Carmen for a 40 percent interest in the capital and rights to future profits under the following independent assumptions.

1. Carmen pays $450,000 directly to Aida and Thais for 40% of each of their interests, and the bonus procedure is used.

2. Carmen pays $600,000 directly to Aida and Thais for 40% of each of their interests, and goodwill is recorded.

3. Carmen invests $450,000 in the partnership for her 40% interest, and goodwill is recorded.

4. Carmen invests $600,000 in the partnership for her 40% interest, and goodwill is recorded.

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