Partner A, B, C has $25,000, $50,000, $20,000 of capital balance and 2:2:1 of profit and loss ratio in the partnership ABC. Partner A sold equity interest to Partner C for $34,000 in order to leave the partnership. What is the journal entry to record the withdrawal of Partner A? a. debit Capital A 25,000 debit Capital B 6,000 debit Capital C 3,000 credit Cash 34,000 b. debit Capital A 34,000 credit Cash 34,000 c. debit Capital A 25,000 debit Capital C 9,000 credit Cash 34,000 d. debit Capital A 25,000 credit Capital C 25,000
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Partner A, B, C has $25,000, $50,000, $20,000 of capital balance and 2:2:1 of
debit Capital B 6,000
debit Capital C 3,000
credit Cash 34,000
credit Cash 34,000
debit Capital C 9,000
credit Cash 34,000
credit Capital C 25,000
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