Holly Renfro contributed a patent, accounts receivable, and $20,000 cash to a partnership. The patent had a book value of $8,000. However, the technology covered by the patent appeared to have significant market potential. Thus, the patent was appraised at $92,000. The accounts receivable control account was $45,000, with an allowance for doubtful accounts of $3,000. The partnership also assumed a $14,000 account payable owed to a Renfro supplier. Provide the journal entry for Renfro’s contribution to the partnership.

Please see explanation column for answers

Explanation:

Journal entry to record  Renfro's contribution to partnership.  

Account Titles and Explanation       Debit           Credit

Cash                                           $ 20,000  

Patent                                            $92,000  

Accounts receivables                    $45,000  

Accounts payable                                            $ 14,000

Allowance for doubtful accounts                      $ 3,000

Holly Renfro, capital                                     $ 140,000

[20,000 + 92,000 + 45,000 - 14000 - 3,000} = $140,000