Sale of shares

[iamdan08]

Ok. So just say one of the owners in a partnership gives the business a non current asset in exchange for shares. How would this effect the balance sheet. Would it be an increase in Owners Equity? I don't really understand how it would be reported. Do they just make more shares, or do they give them shares from someone else? Any help would be appreciated. 

[AppleXY]

Well if a partner contributes an asset such as Equipment, then it would:

DR Equipment
CR Shareholder Equity

Meaning that it will increase the overall equity of the business. I don't really understand what you're saying about issuing new shares, or even shares at all because it is a partnership, not a company.  As partnership ventures are joint, they would both take the equity in proportion to the capital they contributed (or an agreement mentioned in the partnership statement).


The balance sheet would really only contain the combined contributions of both users to simplify matters.

But yeah, I'm sorry that I can't answer your question of issuing/swaping new shares :/

[iamdan08]

Na that is alright. I think I understand now! Thanks

[AppleXY]

Yep. Usually, when a partner contributes the asset, he/she gets the larger share of the equity than the other(s). But this is not concrete, the partnership statement stipulates the equity dividing.