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    Mansoorhdr's Avatar
    Mansoorhdr Posts: 1, Reputation: 1
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    May 27, 2012, 03:07 AM
    Journal entry for selling the business
    I am working in LLC company, the company has been sold and transferred to the new partners , the previous partners had a capital invested 10,000 and they sold $20,000 the capital gain
    Is $10,000 what are the journal entries for sellers and buyers .
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #2

    May 27, 2012, 04:49 AM
    Quote Originally Posted by Mansoorhdr View Post
    I am working in LLC company, the company has been sold and transferred to the new partners , the previous partners had a capital invested 10,000 and they sold $20,000 the capital gain is $10,000 what are the journal entries for sellers and buyers .
    The capital gain represents Goodwill in the hands of the new owner The real question is what is the balance on the Equity account without that you don't know what the real capital gain is. The transactions between the sellers and the buyers are given to you above so there is a receipt of cash and a payment of cash with the other side of the entry being an investment in each case and a capital gain on one hand.
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