Lydia, James, Lola, and Shawn Partnership Assignment

Question 10 (4 points) Lydia, James, Lola, and Shawn are in a partnership together and have a combined capital balance of $800,000. A new partner, Carol pays the partnership $300.000 directly for a 1/5 interest in the new partnership. The partnership chooses the goodwill method to exist partners to account for this transaction and will allocate any increase in implied value evenly amongst the existing partners. The journal entry on the books of the partnership to account for this transaction would be:

a) A Debit Cash $300,000, Debit Goodwill $400,000: Credit each of the existing partner's capital accounts $100,000 each, Credit Capital-Carol S300,000 b) Debit Goodwill $300,000, Debit Cash $800,000: Credit each of the existing partner's capital accounts $200,000 each, Credit Capital-Carol $300,000 O c ) Debit Cash $300,000, Debit Goodwill $500,000; Credit each of the existing partner's capital accounts $125.000 each. Credit Capital-Carol $300,000 d) Debit Goodwill $400,000 Debit Cash $800.000: Credit each of the existing partner's capital accounts $200,000 each. Credit Capital-Carol $400.000 Question 11 (4 points).