Norr and Caylor established a partnership on January 1, 2013. Norr invested cash of $100,000 and Caylor invested $30,000 in cash and equipment with a book value of $40,000 and fair value of $50,000. Make the journal entry for the investment.
Solution
The journal entries for investment of partners will be as follows:
Note: Equipment will be reported at book value.
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Norr and Caylor established a partnership on January 1- 2013- Norr inv.docx
1. Norr and Caylor established a partnership on January 1, 2013. Norr invested cash of $100,000
and Caylor invested $30,000 in cash and equipment with a book value of $40,000 and fair value
of $50,000. Make the journal entry for the investment.
Solution
The journal entries for investment of partners will be as follows:
Note: Equipment will be reported at book value.
1-Jan-13 Cash $100000
Norr $100000
(Cash brought in by Norr)
1-Jan-13 Cash $30000
Equipment $40000
Caylor $70000
(Cash and equipment brought in by Caylor)
