Watson purchased one-half of Dalton's interest in the Patton and Dalton Partnership for $45,000. Prior to the investment, land was revalued to a market value of $135,000 from a book value of $93,000. Patton and Dalton share net income equally. Dalton had a capital balance of $35,000 prior to these transactions.
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a. Provide the journal entry for the revaluation of land. If an amount box does not require an entry, leave it blank.
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b. Provide the journal entry to admit Watson.
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