A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. They admit C into partnership for 1/5th share. C brings RS.30,000 as capital and RS.10,000 as goodwill. At the time of admission of C, goodwill appeared in the Balance Sheet of A and B at RS.3,000. New profit-sharing ratio of the partners will be 5 : 3 : 2. Pass necessary Journal entries.

Explanation

(i) Dr. Capital A/c-RS.1,800 and B's Capital A/c-RS.1,200, Cr. Goodwill A/c-RS.3,000,
(ii) Dr. Bank A/c-RS.40,000, Cr. C's Capital A/c-RS.30,000 and Premium for Goodwill A/c-RS.10,000,
(iii) Dr. Premium for Goodwill A/c-RS.10,000, Cr.A's Capital A/c and B's Capital A/c-RS.5,000 each in their Sacrificing Ratio-1 : 1.