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Cogsworth and Darwin are partners sharing profits and losses 60 per cent and 40 per cent, respectively. On July 1, their capital balances are as follows: Cogsworth $23,000, Darwin $18,600. Howard is admitted as a partner and invests $16,000.
Required: Record the investment by Howard in journal entry form, assuming:
- The new partner is given credit for the actual investment made.
- The new partner is given a1/3 interest, a bonus being given to Howard according to the profit allocation formula.
- The new partner is given a 1/4 interest, a bonus being given to the existing partners according to the profit allocation formula.
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