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In: AccountingPhil Phoenix and Tim Tucson are partners in electrical repairbusiness. Their respective capital balances are...Phil Phoenix and Tim Tucson are partners in electrical repairbusiness. Their respective capital balances are $90,000 and$50,000. and they share profits and losses equally. Because thepartners are confronted with personal and financial problems, theydecided to admit a new partner to the partnership. After anextensive interviewing process they elect to admit Don Dallas intothe partnership. Required: Prepare the journal entry to record theadmission of Don Dallas into the partnership under each of thefollowing conditions:A) Don acquires one-fourth of Phil's capital interest by paying$30,000 directly to him.Answer using Bonus and Good Will MethodB) Don invests $40,000 for a one-fifth interest in partnershipcapital. Payment is made to the partnership.Answer using Bonus and Good Will MethodC) Don acquires one-fifth of each of Phil's and Tim's capitalinterests. Phil receives $25,000 and Tim receives $15.000 directlyfrom Don.Answer using Bonus and Good Will MethodD) Don acquires a one-fifth capital interest for a $60,000 cashinvestment in the partnership. Total capital after the admission isto be $200,000.Answer using Bonus and Good Will Method
