Partnership changes - causing a headache and I'm on holiday soon
I am getting very confused regarding the accounting treatment after a change in partnership shares. The basic premise is that a minority partner is to aquire share from the other partners sufficient to bring parity amongst all the partners. The price for this share has been agreed as the relevant percentage of current assets plus the share of the goodwill (goodwill is however not recognised in the accounts of the partnership and hence does not form part of the capital account)
What are the book keeping transactions if the partner aquiring the addional share does not actually phsically pay any of the other partners or introduce cash into the business - would it be debit minorirty partners capital account the value of the share; credit other partners capital accounts? How does the goodwill effect the postings?
I am sure this is probably quite straight forward - I just need a prompt!