Wallace and Simpson formed a partnership with Wallace contributing $60,000 and Simpson contributing $40,000.Their partnership agreement calls for the income (loss)division to be based on the ratio of capital investments.Wallace sold one-half of his partnership interest to Prince for $55,000 when his capital balance was $78,000.The partnership would record the admission of Prince into the partnership as:
A)Debit Wallace,Capital $55,000;credit Prince,Capital $55,000.
B)Debit Wallace,Capital $39,000;credit Prince,Capital $39,000.
C)Debit Prince,Capital $55,000;credit Wallace,Capital $55,000.
D)Debit Wallace,Capital $30,000;credit Prince,Capital $30,000.
E)Debit Wallace,Capital $39,000;debit Cash $16,000;credit Prince,Capital $55,000.

Question

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The Answer of Wallace and Simpson formed a partnership with Wallace contributing $60,000 and Simpson contributing $40,000.Their partnership agreement calls for the income (loss)division to be based on the ratio of capital investments.Wallace sold one-half of his partnership interest to Prince for $55,000 when his capital balance was $78,000.The partnership would record the admission of Prince into the partnership as:
A)Debit Wallace,Capital $55,000;credit Prince,Capital $55,000.
B)Debit Wallace,Capital $39,000;credit Prince,Capital $39,000.
C)Debit Prince,Capital $55,000;credit Wallace,Capital $55,000.
D)Debit Wallace,Capital $30,000;credit Prince,Capital $30,000.
E)Debit Wallace,Capital $39,000;debit Cash $16,000;credit Prince,Capital $55,000.

Wallace and Simpson Formed a Partnership with Wallace Contributing $60,000