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Sale to a New Partner

19 August, 2015 - 15:54

This method is similar to the purchase of an existing partner’s interest. Assume C sells a partnership interest to D. Payment for the ownership interest is a private transaction, though the existing partners must approve the new arrangement. There is no change in either the assets or the capital of the partnership as a result of this transaction. However, the following journal entry would be made:

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The balance sheet would show the following:

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