Question

J and R are partners. V is admitted as a partner for 1/4 share of profit but is unable to contribute premium for goodwill in cash amounting to ₹ 80,000 and so it is decided to raise a loan account in the name of V.

You are required to pass a single journal entry in order to give effect the above problem.

Answer 1

Journal Entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
	V's Loan A/c   ...Dr.		80,000
	To J's Capital A/c			40,000
	To R's Capital A/c			40,000
	(Being the adjustment for V's share of premium for goodwill by raising a loan account in his name, credited to sacrificing partners in a 1 : 1 ratio)

Working note:

Old Ratio/Sacrificing Ratio: Since no profit-sharing ratio is mentioned for J and R, they are assumed to share profits equally (1 : 1).

Distribution: The ₹ 80,000 premium is split equally:

J's Share = `80,000 xx 1/2 = 40,000`

R's Share = `80,000 xx 1/2 = 40,000`