Partners X and Y are the owners of Partnership XY. X has a capital balance of $60,000 and Y has a capital balance of $80,000. Partner Z is entering the partnership by purchasing 1/3 of X for $25,000 and 1/4 of Y for $25,000. Answer the given problems:
a) Give the journal entry for the transaction above.
b) Find out the capital balance in Partner X's account.
c) How much did Z pay to enter the partnership?
d) What happened to the total partnership capital of the firm?
e) Describe the name of the method we used in this condition?