Question

Joel Wanagen purchased directly from Vangie Buenaventura her 30,000 partnership interest for 50,000. The entry to record the transaction is for ________.

Answer 1

The entry to record the transaction is: Debit: Partnership Interest (Asset) - $30,000, Credit: Cash (Asset) - $50,000, Credit: Gain on Sale of Partnership Interest (Income) - $20,000.

Step-by-step explanation:

The entry to record the transaction is:

1. Debit: Partnership Interest (Asset) - $30,000
2. Credit: Cash (Asset) - $50,000
3. Credit: Gain on Sale of Partnership Interest (Income) - $20,000

This transaction involves the purchase of a partnership interest. Joel Wanagen bought Vangie Buenaventura's 30,000 partnership interest for $50,000. The partnership interest is recorded as an asset on the buyer's side and is debited for its value ($30,000). The cash paid for the purchase is recorded as an asset on the seller's side and is credited for the amount paid ($50,000). Finally, the gain on the sale of the partnership interest is recorded as income on the seller's side and is credited for the difference between the purchase price and the value of the partnership interest ($20,000).