Answered

Discover the best answers at Westonci.ca, where experts share their insights and knowledge with you. Discover detailed answers to your questions from a wide network of experts on our comprehensive Q&A platform. Our platform offers a seamless experience for finding reliable answers from a network of knowledgeable professionals.

S. Wang and T. Wu are partners with equal capital balances of $50,000 each. They agree to let J. Li invest $20,000 in their partnership for a 10% interest, including bonuses to the existing partners. The journal entry to reflect the bonus to Wang will include a credit to _______ in the amount of ______.

Sagot :

abiolataiwo2015

The journal entry to reflect the bonus to Wang will include a credit to Wang, Capital in the amount of $4,000

First step is to calculate S. Wang and T. Wu and  J. Li capital amount

Capital=$50,000+$50,000+$20,000

Capital=$120,000

Second step is to calculate their new capital

New capital=$120,000*.10

New capital=$12,000

Now to determine Wang bonus amount we have to divide the capital equally between S. Wang and T. Wu

Bonus=($20,000-$12,000)/2

Bonus=$8,000/2

Bonus=$4,000

Therefore journal entry to reflect the bonus to Wang will include a credit to Wang, Capital in the amount of $4,000

 

Learn more about Partnership  share of Capital here:

https://brainly.com/question/13219570

Thank you for your visit. We are dedicated to helping you find the information you need, whenever you need it. Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. Westonci.ca is your go-to source for reliable answers. Return soon for more expert insights.