In this example, why the new partner's capital account has been dr. When the partner does not bring goodwill, his current account will be dr, but why in this example his capital account has been dr

Jishna · 20 Jun 2025

In this case, C does not bring in any goodwill in the form of cash, so C's goodwill is adjusted against C's capital. So the first journal entry was cash ac dr to capital ac . And the second entry was new partners capital dr to old partners capital ie,Since C does not bring cash, C gives cash from his capital account to the old partners capital ac . So C's capital decreases (debit). A and B increase.(credit)