Chapter 10 Journal Entries

Question 1

Admission of a New Partner with Bonus to Existing Partners

Answer 1

DR: Cash
CR: Old, Capital [percent of bonus]
CR: Old, Capital [percent of bonus]
CR: New Capital [share]

Question 2

Admission of a New Partner with Bonus to New Partner

Answer 2

DR: Cash
DR: Old, Capital [percent of bonus]
DR: Old, Capital [percent of bonus]
CR: New, Capital [share]

Question 3

Admission of a New Partner with Goodwill Credited to Olds

Answer 3

DR: Cash
DR: Goodwill
CR:          Old, Capital [percent]
CR:          Old, Capital [percent]
CR:          New, Capital [contribution]

Question 4

Withdrawal of Partner: Bonus Method

Answer 4

DR: Asset Adjustment
CR:          Old, Capital
CR:          Old, Capital
CR:          New, Capital
DR: Old, Capital [percent of deficit]
DR: Old, Capital [percent of deficit]
DR: New, Capital [buy him out]
CR:          Cash

Question 5

Withdrawal of Partner: Goodwill Method

Answer 5

DR: Asset Adjustment
CR:          Old, Capital
CR:          Old, Capital
CR:          New, Capital
DR: Goodwill
CR:          Old, Capital
CR:          Old, Capital
CR:          New, Capital [get to exact amount of buyout]          
DR: New, Capital
CR:          Cash

Question 6

Adjust TB Before Liquidation

Answer 6

DR: Cash
DR: Noncash Assets
CR:          Liabilities
CR:          A Advance
CR:          B Advance
CR:          A Capital
CR:          B Capital
CR:          C Capital

Question 7

Establish Asset Retirement Obligation & Cost

Answer 7

DR: Asset Retirement Cost
CR: Asset Retirement Obligation [PV]

Question 8

Record Accretion Expense

Answer 8

DR: Accretion Expense
CR: Asset Retirement Obligation

Question 9

Record Depreciation of ARC

Answer 9

DR: Depreciation Expense
CR: Accumulated Depreciation

Question 10

Cost of Dismantling in Final Year

Answer 10

DR: Asset Retirement Obligation
DR: Dismantling Expense [any extra]
CR: Cash

Question 11

Troubled Debt Restructuring on Books of the Debtor Using Asset

Answer 11

DR: Notes Payable
DR: Interest Payable
CR:          Asset Traded
CR:          Gain on Disposal of Asset
CR:          Gain on Restructuring

Question 12

Troubled Debt Restructuring on Books of Debtor Using Stock

Answer 12

DR: Notes Payable
DR: Interest Payable
CR:          Common Stock
CR:          APIC
CR:          Gain on Restructuring

Question 13

Troubled Debt Restructuring on Books of Debtor Using Modification of Terms

Answer 13

DR: Notes Payable [old]
DR: Interest Payable [old]
CR: Note Payable [new - include interest]
CR: Gain on Restructuring

Question 14

Note Receivable Using Imputed Interest

Answer 14

DR: Note Receivable
CR: Sales [PV]
CR: Discount on Note Receivable [imputed int amt]

Question 15

Amortize Discount From Imputed Interest

Answer 15

DR: Discount on Notes Receivable
CR: Interest Income

Question 16

Loss on Firm Purchase Commitment (hedge transaction) at year end

Answer 16

DR: Loss on Firm Purchase Commitment
CR: Firm Purchase Commitment Liability

Question 17

Gain on Forward Contract Hedge at year end

Answer 17

DR: Fair Value Hedge
CR: Gain on Fair Value Hedge

Question 18

Settlement of Fair Value Hedge and Firm Purchase Commitment

Answer 18

DR: Cash
CR:          Fair Value Hedge
DR: Firm Purchase Commitment Liability
DR: Inventory
CR:          Cash

Question 19

Gain on Forward Contract Hedge at year end

Answer 19

DR: Cash Flow Hedge
CR: OCI - Effective Portion of Hedge

Question 20

Settlement of Forward Contract and Firm Purchase Commitment

Answer 20

DR: Cash
CR: Cash Flow Hedge
DR: Inventory
CR: Cash