Wright,Bell,and Edison are partners and share income in a 2:5:3 ratio.The partnership's capital balances are as follows: Wright,$33,000,Bell $27,000 and Edison $40,000.Edison decides to withdraw from the partnership,and the partners agree not to revalue the assets upon Edison's retirement.The journal entry to record Edison's June 1 withdrawal from the partnership if Edison is paid $40,000 for his equity is:
A)Debit Edison,Capital $40,000;credit Cash $40,000.
B)Debit Wright,Capital $20,000;Debit Bell,Capital $20,000;credit Cash $40,000.
C)Debit Wright,Capital $20,000;Debit Bell,Capital $20,000;credit Edison,Capital $40,000.
D)Debit Edison,Capital $40,000;credit Wright,Capital $20,000;credit Bell,Capital $20,000.
E)Debit Cash $40,000;credit Edison,Capital $40,000.

Question

Quizplus · Accepted Answer

Edison is withdrawing his exact capital balance of $40,000, so the journal entry would simply debit Edison's capital account and credit cash for the same amount.

Wright,Bell,and Edison Are Partners and Share Income in a 2:5:3