When goodwill does not exist in the books, ............... are credited with their share of goodwill and new partner is.......... by the amount of goodwill not brought by him. |
Sacrificing partner, credited Sacrificing partner, Debited Old partner, Debited Old partner, credited |
Sacrificing partner, Debited |
The correct answer is option 2- Sacrificing partner, Debited. When goodwill does not exist in the books, sacrificing partners are credited with their share of goodwill and new partner is debited by the amount of goodwill not brought by him. The journal entry in this case is- Sometimes the new partner brings part of premium for goodwill in cash. In such a situation, new partners current account will be debited by the amount not brought by new partner. |