Final answer:
A bonus paid to a new partner typically results in a decrease in the existing partners' capital accounts, as the funds for the bonus are allocated from their capital based on their ownership percentages.
Step-by-step explanation:
When a bonus is paid to a new partner upon admission into a partnership, the effect on the existing partners capital accounts is typically a reduction in their balances. This happens because the bonus to the new partner is allocated from the existing partners' capital based on their share percentages in the business or an agreed upon formula. For example, if the bonus is $20,000 and there are two existing partners, Partner A and Partner B, with equal shares, each might see their capital accounts reduced by $10,000 to pay for the new partner's bonus. This represents a reallocation of the existing partners' equity to the new partner as an incentive for joining the partnership.