Zach has bought Biannca's interest in the A&B Partnership for a $120,000 direct payment to Biannca.Zach and Biannca's capital balances before the sale were $48,000 and $72,000,respectively.The entry to record the purchase of interest in partnership is:

Question

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The entry to record the purchase of interest in partnership is a debit to Biannca's capital account for $72,000 (her previous capital balance) and a credit to Zach's capital account for $48,000 (his previous capital balance). The remaining payment of $120,000 is then allocated between their capital accounts based on their profit and loss sharing ratio, which is not provided in the question. Therefore, the entry would be:
Debit Biannca's Capital Account: $72,000
Credit Zach's Capital Account: $48,000
Credit Cash: $120,000
Total credit: $168,000

Zach Has Bought Biannca's Interest in the A&B Partnership for a $120,000