Mike Derr and Mark Finger form a partnership by combining assets of their separate businesses. The following balance sheet is from Derr's sole proprietorship. The market value of Derr's equipment is $5,000 and the market value of land is $8,000. Balance Sheet Assets Liabilities Cash $ 1,000 Accounts payable $ 4,500 Supplies 3,000 Notes payable 3,100 Equipment $ 11,000 Total liabilities 7,600 Accumulated depreciation-Equip. (9,000) 2,000 Equity Land 4,000 M. Derr, Capital 2,400 Total assets $ 10,000 Total liabilities and equity $ 10,000 Prepare the partnership's journal entry to record Derr's investment.

Question

Julio Mcpherson

Business

28 November, 16:43

Mike Derr and Mark Finger form a partnership by combining assets of their separate businesses. The following balance sheet is from Derr's sole proprietorship. The market value of Derr's equipment is $5,000 and the market value of land is $8,000. Balance Sheet Assets Liabilities Cash $ 1,000 Accounts payable $ 4,500 Supplies 3,000 Notes payable 3,100 Equipment $ 11,000 Total liabilities 7,600 Accumulated depreciation-Equip. (9,000) 2,000 Equity Land 4,000 M. Derr, Capital 2,400 Total assets $ 10,000 Total liabilities and equity $ 10,000 Prepare the partnership's journal entry to record Derr's investment.

+4

Answers (1)

Know the Answer?

Ayers · Answer 1

Answer and Explanation:

According to the scenario, journal entry for the given data are as follows:

Cash A/c Dr. $1,000

Supplies A/c Dr. $3,000

Land A/c Dr. $8,000

Equipment A/c Dr. $5,000

To A/c Payable A/c $4,500

To Notes payable A/c $3,100

To M. Derr capital A/c $9,400 ($1000+$3000+$8000+$5000-$4500-$3100)

(Being Derr's investment is recorded)