Question

The capital accounts balances of partners in The Ministry partnership on July 1, 2019 are as...

The capital accounts balances of partners in The Ministry partnership on July 1, 2019 are as follows:

Minn, Capital (20%) P1,200,000
Ister, Capital (30%) 2,000,000
Ryan, Capital (50%) 800,000
Total P4,000,000

On July 1, 2019 Ryan withdrew from the partnership when Minn bought his capital interest for P850,000. What is the journal entry upon retirement of Ryan?

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Answer #1
Date Particulars   Debit (in $) Credit (in $)
2019
1st July Ryan's Capital                  8,50,000
        Minn's Capital                       8,50,000

The excess amount to Minn is treated as a Bonus (or) Goodwill paid by Ryan for the partnership.

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