North invested RM40,000 in the partnership of West and East. The capital balance of West and East were RM40,000 and RM60,000, respectively. Income and loss is shared according to the ratio of equity balances. North was to receive 25% interest in the new partnership. The journal entry to record this transaction would NOT include: A. a debit to cash for RM40,000 B. a credit to West's capital account for RM2,000 C. a credit to East's capital account for RM3,000 D. a credit to North's capital account for RM30,000

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter15: Partnership Accounting
Section: Chapter Questions
Problem 1PA: The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after...
icon
Related questions
Question

North invested RM40,000 in the partnership of West and East. The capital balance of West and East were RM40,000 and RM60,000, respectively. Income and loss is shared according to the ratio of equity balances. North was to receive 25% interest in the new partnership. The journal entry to record this transaction would NOT include:

A. a debit to cash for RM40,000

B. a credit to West's capital account for RM2,000

C. a credit to East's capital account for RM3,000

D. a credit to North's capital account for RM30,000

Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Partners and Partnerships
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Principles of Accounting Volume 1
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
Accounting
ISBN:
9780357391266
Author:
Nellen
Publisher:
Cengage
Individual Income Taxes
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
SWFT Corp Partner Estates Trusts
SWFT Corp Partner Estates Trusts
Accounting
ISBN:
9780357161548
Author:
Raabe
Publisher:
Cengage
College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Excel Applications for Accounting Principles
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning