the firm and it is taken by old partner in their sacrifice ratio . For this following journal entry pass in the books of firm Cash / Bank Account Debit xxxxxxxxx
To Goodwill / Premium Account xxxxxxxxxx
Goodwill account debit xxxxxxxx ( share of new partner ’ s goodwill ) To old partner ’ s capital account xxxxxxx ( divide in sacrifice ratio ) 3rd method
when new partner bring goodwill in cash in business and taken by old partner and then withdraw by old partner
Above two entries will pass as same as in second method but third new entry will pass
Old partner ’ s capital account Debit xxxxxxxxxxx To cash / bank account xxxxxxxx 4th method when new partner do not bring goodwill in cash form
If new partner do not bring goodwill in cash in firm , then following entry will pass for the adjustment of goodwill .
New partner ’ s capital account debit xxxxxxxx ( share of goodwill ) To old partner ’ s capital account xxxxxxxxx ( division in sacrifice ratio )
5th method If partial in cash form of goodwill
Part of cash goodwill Cash account dr . xxxxxx To goodwill / premium account xxxxxxxx