Accounting Principles: E12-11 The capital accounts of Jonathan Faber and Faheem Ahmad

Accounting Principles
E12-11 Admitting New Partners Who Buy an Interest and Contribute Assets
The capital accounts of Jonathan Faber and Faheem Ahmad have balances of $150,000 and $110,000, respectively. Lauren Wells and Rachel Lee are to be admitted to the partnership. Wells buys one-fifth of Faber's interest for $35,000 and one-fourth of Ahmad's interest for $25,000. Lee contributes $70,000 cash to the partnership, for which she is to receive an ownership equity of $70,000.

a. Journalize the entries to record the admission of (1) Wells and (2) Lee.
b. What are the capital balances of each partner after the admission of the new partners?
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