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vivado [14]
3 years ago
14

Cody Jenkins and Lacey Tanner formed a partnership to provide landscaping services. Jenkins and Tanner shared profits and losses

equally. After all the tangible assets have been adjusted to current market prices, the capital accounts of Cody Jenkins and Lacey Tanner have balances of $39,000 and $51,000, respectively. Valeria Solano has expertise with using the computer to prepare landscape designs, cost estimates, and renderings. Jenkins and Tanner deem these skills useful; thus, Solano is admitted to the partnership at a 30% interest for a purchase price of $24,000. a. Determine the recipient and amount of the partner bonus. $ b. Provide the journal entry to admit Solano into the partnership. For a compound transaction, if an amount box does not require an entry, leave it blank. c. Why would a bonus be paid in this situation
Business
1 answer:
Artyom0805 [142]3 years ago
4 0

Answer:

A) 10,200

Explanation:

Capital balance of both partners :

Cody Jenkins = $39,000

Lacey Tanner = $51,000

Existing capital =. $(39,000 + 51,000) = $90,000

New purchase price - Solano = $24,000

Total capital = $(90,000 + 24000) = $114,000

New capital :

New partner share × total capital

New partner capital = 30 % × 114000 = $34,200

Amount of partner bonus = new purchase price - new partner capital

Amount of partner bonus = 24,000 - 34,200 = - $10,200

Bonus share ratio:

Cody Jenkins and Lacey Tanner share profit and losses equally :

Cody Jenkins and Lacey Tanner :

0.5 × 10,200 = -$5,100

B)

Account. - - - - - - - - - - - - - Debit - - - - - Credit

Cash - - - - - - - - - - - - - - - 24,000

Capital: valerio Solano - - - - - - - - - - - 34,200

Capital: Cody Jenkins - - - 5,100

Capital: Lacey Tanner - - - 5,100

Total - - - - - - - - - - - - - - - 34,200 - - - 34,200

C.)

The purchase price is less than the book value of the 30% percentage of the partnership purchase, valerio Solano purchase price was $24,000 but he was allocated 30% of total capital which is $34,200

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1. Suppose two types of firms wish to borrow in the bond market. Firms of type A are in good financial health and are relatively
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On December 31, 2020, Wayne, Inc. sold $4,000,000 (face value) of bonds. The bonds are dated December 30, 2020, pay interest ann
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Answer:

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1. The stated interest rate for this bond issue is:

= 8%.

2. The market interest rate for this bond issue is:

= 9%.

3. The selling price of the bonds as a percentage of the face value is 97.5% ($3,900,000/$4,000,000 * 100)

4. Journal Entry to record the sale of the bond issue on December 31, 2020:

December 31, 2020:

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Debit Bonds Discounts $100,000

Credit Bonds Payable $4,000,000

To record the bonds proceeds, discounts, and liability.

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Credit Bonds Amortization $31,000

Credit Cash $320,000

To record the first payment of interest and amortization.

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a) Data and Calculations:

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Market interest rate = $351,000/$3,900,000 * 100 = 9%

Cash payment =     $320,000

Coupon interest rate = $320,000/$4,000,000 * 100 = 8%

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