A and B own a piece of property. Each has 50% ownership and a capital account of $50k. A sells his interest to New Guy for $1 million, so New Guy's capital account is now $1 million. New Guy and B sell the property for $1,050,000. Is the cash from the sale split New Guy = $1 million and B = $50k? If so, doesn't that sort of screw B? If he had sold the property when he and A owned it he would have received far more ($525k), but now he's just getting his capital back.
And how would you book New Guy's capital account? Cr. New Guy Capital, Dr. A Capital, Dr. ???
And how would you book New Guy's capital account? Cr. New Guy Capital, Dr. A Capital, Dr. ???