If a new partner is to be admitted to a partnership and a bonus is attributed to the old partnership, the bonus should be divided between the capital accounts of the original partners according to their capital balances.

Bonus

A bonus is an extra payment given to employees beyond their regular salary, often awarded for achieving specific performance targets or as part of the benefits package.

Capital Accounts

Represent the amount of money the owners have invested in a business, plus any profits or minus any losses.

Original Partners

The initial individuals or entities that form a partnership agreement to create and manage a business.