How can I make entry in case of payment made to old partners b
y existing partners if the payments were not recorded or it is made privately without taking cash from business?
Can I make entry like this
Retiring partner a/c Dr
To Existing partner capital
need urgent help.
With regards Rahul
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Payment to retiring partners
Replies (6)
Firstly, Why payment is made to old partners,
for Goodwill or part of any contract,
Second if not for any of above resons then not required for books in firms books it will be considered for individual partners taxation
yes. you can pass that adjustment entry.
No you cant pass adjustment entry without knowing the facts and nature of transaction
our business had 2 partners in beginning and new 3 partners ( they r also partners of another firm) were admitted and the first two partners retired and their capital balance was paid by new partners from other firm's cash. No Goodwill or profit paid
so in present case it can be treated as capital balance of retiering partner was paid by new partner by introducing their capital share in firm.,
so you will pass JV for inter ledger adjustment , but also consider payment is made in cash and through bank transfer
if it is off record settlement, we can pass adjustment entry what I have specified earlier..
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