Partnership Journal Entries

The partnership journal entries below act as a quick reference, and set out the most commonly encountered situations when dealing with the double entry posting relating to partnerships.

For a fuller explanation of partnership journal entries, view our tutorials on partnership formation, partnership income distribution, and partnership liquidation.

In each case the partnership journal entries show the debit and credit account together with a brief narrative. For a fuller explanation of journal entries, view our examples section.

Partnership Journal Entries Examples

Partners capital introduced journal entry
Account Debit Credit
Bank account XXX
Partner capital account XXX

Partners drawings journal entry
Account Debit Credit
Partner current account XXX
Bank account XXX

 


Loan made by partner journal entry
Account Debit Credit
Bank account XXX
Loan account XXX

Interest on loan from partner journal entry
Account Debit Credit
Income statement XXX
Interest payable XXX

Profit for the year to appropriation account journal entry
Account Debit Credit
Income statement XXX
Appropriation account XXX

Partner salaries journal entry
Account Debit Credit
Appropriation account XXX
Partner current account XXX

Interest earned on capital journal entry
Account Debit Credit
Appropriation account XXX
Partner current account XXX

Interest charged on drawings journal entry
Account Debit Credit
Partner current account XXX
Appropriation account XXX

Partner share of profit journal entry
Account Debit Credit
Appropriation account XXX
Partner current account XXX

Partner share of loss journal entry
Account Debit Credit
Partner current account XXX
Appropriation account XXX

 

 

 

 

New partner admission at book value journal entry
Account Debit Credit
Cash XXX
Capital – New partner XXX

New partner admission – Goodwill method at greater than book value journal entry
Account Debit Credit
Cash XXX
Goodwill XXX
Capital – New partner XXX
Capital – Existing partners XXX

New partner admission – Goodwill method at less than book value journal entry
Account Debit Credit
Cash XXX
Goodwill XXX
Capital – New partner XXX

New partner admission – Bonus method at greater than book value journal entry
Account Debit Credit
Cash XXX
Capital – New partner XXX
Capital – Existing partners XXX

New partner admission – Bonus method at less than book value journal entry
Account Debit Credit
Cash XXX
Capital – New partner XXX
Capital – Existing partners XXX

Last modified July 20th, 2018 by Michael Brown

About the Author

Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years in all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.

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