SPECIAL ACCOUNTS AND ENTRIES 185 



with his share of the profits, or debits him with his share 

 of the losses. 



Opening Entry of a Partnership. The opening entry of 

 a partnership shows the resources brought into the busi- 

 ness, the liabilities assumed, and the total investment of 

 each partner, credited to his Capital account. For exam- 

 ple, if A. B. Clay and Ike Laahre enter into partnership 

 on a rented farm, the entries in Illustration 33 would in- 

 dicate the amounts contributed by each: 



ILLUSTRATION 33 



PARTNERSHIP OPENING ENTRIES 



A partnership agreement having been effected, we (A. B. Clay 

 and Ike Laahre) today open a set of books by recording our 

 respective investments in the firm of Clay and Laahre by the 

 following entries: 



March 1,1917 



Cash $1,000 



Equipment 500 



Note Payable $500 



A. B. Clay, Capital. . . 1,000 



March 1,1917 



Cash '.... $1,000 



Horses 1,000 



Ike Laahre, Capital . . . $2,000 



The entries of Illustration 33 indicate that Clay put in 

 $1000 net capital and Laahre $2000. The capital of the 

 business is therefore $3000. In a partnership each part- 

 ner has a capital account bearing his name. In the case 

 at hand, A. B. Clay's Capital account is credited with 

 $1000 and Ike Laahre 's with $2000. In order to find the 

 aggregate capital of the business conducted on a partner- 

 ship basis, it is necessary to take the sum of the balances 

 of the capital accounts. 



