JAMB Accounting 2012 Objective — Question 40

Musa and Mary decide to convert their partnership business into a limited liability company. Musa has a capital of ₦30,000 and goodwill of ₦15,000, while Mary invests ₩35,000... If the profits and losses are shared equally, the journal entries to record goodwill A. debit goodwill ₦15,000, cash ₦20,000 and credit Mary's capital ₦35,000

• A. debit goodwill ₦15,000, cash ₦20,000 and credit Mary's capital ₦35,000
• B. credit goodwill ₦15,000 and debit Mary's capital ₦35,000
• C. credit cash ₩20,000, debit Mary's capital ₩35,000 and credit cash ₩20,000, debit Mary's capital ₩35,000
• D. debit old partner's capital ₩15,000, credit cash ₩20,000 and Mary's capital ₩35,000Correct