When Danny withdrew from John, Daniel, Harry, and Danny, LLP, he was paid $80,000, although his capital account balance was only $60,000. The four partners shared net income and losses equally, and no revaluation will take place. The journal entry to record the effect on John's capital due to Danny's withdrawal would include: $6,667 debit to John, Capital. O $5,000 debit to John, Capital. O $20,000 debit to John, Capital. $5,000 credit to John, Capital. $6,667 credit to John, Capital.
When Danny withdrew from John, Daniel, Harry, and Danny, LLP, he was paid $80,000, although his capital account balance was only $60,000. The four partners shared net income and losses equally, and no revaluation will take place. The journal entry to record the effect on John's capital due to Danny's withdrawal would include: $6,667 debit to John, Capital. O $5,000 debit to John, Capital. O $20,000 debit to John, Capital. $5,000 credit to John, Capital. $6,667 credit to John, Capital.
Chapter7: Deductions And Losses: Certain Business Expenses And Losses
Section: Chapter Questions
Problem 31P
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Transcribed Image Text:When Danny withdrew from John, Daniel, Harry, and Danny, LLP, he was paid
$80,000, although his capital account balance was only $60,000. The four partners
shared net income and losses equally, and no revaluation will take place. The journal
entry to record the effect on John's capital due to Danny's withdrawal would include:
$6,667 debit to John, Capital.
O $5,000 debit to John, Capital.
O $20,000 debit to John, Capital.
$5,000 credit to John, Capital.
$6,667 credit to John, Capital.
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