Mike Derr and Mark Finger form a partnership by combining assets of their separate businesses. The following balance sheet information is provided by Derr from his sole proprietorship.
| Cash | $ | 1,800 | Accounts payable | $ | 5,300 | ||||
| Supplies | 3,800 | Notes payable | 3,900 | ||||||
| Equipment | $ | 15,000 | Total liabilities | 9,200 | |||||
| Less: Accumulated depreciation—Equip. | 12,200 | 2,800 | |||||||
| Land | 4,800 | M. Derr, Capital | 4,000 | ||||||
| Total assets | $ | 13,200 | Total liabilities and equity | $ | 13,200 | ||||
The new partners obtain appraised values and agree to accept the book values for Derr’s assets and liabilities except for the following: Equipment is valued at $5,800, and land is worth $8,800.
Required
Prepare the partnership’s journal entry to record Derr’s investment.
Journal entry worksheet
Record investment of Derr.
Note: Enter debits before credits.
|
Enjoy 24/7 customer support for any queries or concerns you have.
Phone: +1 213 3772458
Email: support@gradeessays.com