Suppose Takwa paid N30 000 for goodwill; this amount would be?

Osei and Yabo were in partnership sharing profits and losses in the ratio of 2:3. On admitting Takwa, the profit and loss sharing ratio was charged to 1:1:1. Suppose Takwa paid N30 000 for goodwill , this amount would be?

A. credited to Takwa’s current acount
B. debited to goodwill account
C. share to all the partners’ capital account
D. credited to the old partners’ capital account

Correct Answer:

Option B – debited to goodwill account