Question

The partners in the biz partnership have agreed that partner mandy may sell her $100,000 equity in the partnership to brittney, for which brittney will pay mandy $85,000. Prepare the partnership's journal entry to record the sale of mandy's interest to brittney on september 30.

Answer 1

Answer:

Mandy Capital                     A/c   Dr.  $100,000

Brittney Capital                  A/c    Cr.                     $100,000

Explanation:

Mandy selling $100,000 shares of assets, so we will report the transaction on the sale of stock by the amount of equity sold. Now, all parties will negotiate the price that one can sell to another for this equity valuation, which would be $85,000 in this case.