Jack Herington has owned and operated a proprietorship for several years. On Jan

Question

Jack Herington has owned and operated a proprietorship for several years. On January 1, he decides to terminate this business and become a partner in the firm of Herington and Kaspar. Herington's investment in the partnership consists of $12,000 in cash, and the following assets of the proprietorship: accounts receivable $14,000 less allowance for doubtful accounts of $2,000, and equipment $20,000 less accumulated depreciation of $4,000. It is agreed that the allowance for doubtful accounts should be $3,000 for the partnership. The fair market value of the equipment is $13,500.

Instructions

Journalize Herington's admission to the firm of Kaspar and Herington. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)

Explanation / Answer

Hi, Please find the journal entry as below: Accounts Receivable Dr. 14,000 Equipment Dr. 13500 Cash Dr. 12,000 Allowance for Doubtful Accounts Cr. 3000 Jack Herrington, Capital Cr. 36500 Thanks, Aman

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