Maria Rhodes and Craig Blair, who have ending capital bala
Question and Solution
Maria Rhodes and Craig Blair, who have ending capital balances of $90,000 and $40,000, respectively, agree to admit two new partners to their business on September 1, 20--. Lori Kinder will buy one-third of Rhodes’s capital interest for $40,000 and one-fifth of Blair’s capital interest for $12,000. Payments will be made directly to the partners. Todd Gilbert will invest $30,000 in the business for which he will receive a $30,000 capital interest. 1. Prepare general journal entries showing the transactions admitting Kinder and Gilbert to the partnership. 2. Calculate the ending capital balances of all four partners after the transactions.