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When a newly admitted partner pays a bonus to the existing partners, the new partner's capital account is debited to record bonus to the old partners. *

a. True
b. False

1 Answer

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Final answer:

The new partner's capital account is credited, not debited, to record the bonus to the old partners.

Step-by-step explanation:

The statement in the question is false.

When a newly admitted partner pays a bonus to the existing partners, the new partner's capital account is credited to record the bonus to the old partners.

This is because the bonus paid by the new partner increases the capital of the existing partners, so it is recorded as a credit to the new partner's capital account.

User John Lane
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