Raul and Bianca Are Partners

question 158

Multiple Choice

Raul and Bianca are partners. Raul has a capital balance of $50,000 and Bianca has a capital balance of $36,000. Bianca sells half of her ownership interest to Bill and Bianca accepts $20,000 from Bill. Which of the following is true of the journal entry to record this transaction?

• A)Bianca, Capital is credited for $20,000 and Raul, Capital is debited for $18,000.
• B)Bill, Capital is credited for $18,000 and Raul, Capital is debited for $20,000.
• C)Bill, Capital is credited for $18,000 and Bianca, Capital is debited for $18,000.
• D)Bianca, Capital is credited for $20,000 and Raul, Capital is debited for $20,000.

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Definitions:

Average Tax Rate

The proportion of total income paid in taxes, calculated by dividing total tax amount by total income.

Circular 230

Regulations and guidelines issued by the US Department of the Treasury for tax professionals regarding practice before the IRS.

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