Table 12-5 Jim and Joe Are Partners Agreeing to Share Profits and Profits

question 106

Multiple Choice

Table 12-5
Jim and Joe are partners agreeing to share profits and losses in a 2:6 ratio, respectively. Business has been profitable and they have decided to admit Jewel to the partnership for a cash investment. The balances in Jim and Joe's capital accounts are presently $240,000 and $260,000, respectively.
-Refer to Table 12-5.If Jewel is given a 20% interest in the partnership in exchange for $90,000 cash,the entry to record her investment includes a:

• A) debit to Jim, Capital for $7,000
• B) credit to Joe, Capital for $21,000
• C) credit to Jewel, Capital for $90,000
• D) debit to Cash for $118,000