question archive Lewis and Watson formed a partnership
Lewis and Watson formed a partnership
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Lewis and Watson formed a partnership. Lewis contributed $15,000 cash and accounts receivable worth $13,000. Watson's investment included cash, $8,000; inventory, $9,000; and supplies, $1,000. (All values are current fair market values). Prepare the journal entry to record the formation of the partnership.
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Answer:
Journal Entries:
| Account title and Explanation | Debit | Credit |
| Cash | $15,000 | |
| Accounts receivable | $13,000 | |
| Lewis, Capital | $28,000 | |
| [To record investment of Lewis] | ||
| Cash | $8,000 | |
| Inventory | $9,000 | |
| Supplies | $1,000 | |
| Watson, Capital | $18,000 | |
| [To record investment of Watson] |
