Question

Jesse and Tim form a partnership by combining the assets of their separate businesses. Jesse contributes accounts receivable with a face amount of $48,000 and equipment with a cost of $177,000 and accumulated depreciation of $104,000. The partners agree that the equipment is to be valued at $68,500, that $3,600 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $2,500 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Tim contributes cash of $22,000 and merchandise inventory of $44,500. The partners agree that the merchandise inventory is to be valued at $48,000.

Required:
Journalize the entries to record in the partnership accounts (a) Jesse’s investment and (b) Tim’s investment. Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

Check the explanation

Step-by-step explanation:

Journal Entries to be recorded in the books of Partnership accounts

a)Jesse's Investment

Account Name Debit($) Credit($)

Accounts Receivable(48,000-3600) 44300

Equipment(Agreed Price) 68,500

Allowance for Doubtful Debts 2500

Jesse,Capital A/c(Balancing Figure) 110300

b.Tim's Investment

Account Name Debit($) Credit($)

Cash 22000

Inventory(At Agreed price) 48000

Tim Capital 70,000