Raul and Bianca Are Partners

question 3

Multiple Choice

Raul and Bianca are partners.Raul has a capital balance of $50,000 and Bianca has a capital balance of $37,000.Bianca sells half of her ownership interest to Bill for $20,500.Which of the following is TRUE of the journal entry to record this transaction?

• A) Bianca, Capital is credited for $18,500 and Raul, Capital is debited for $18,500.
• B) Bill, Capital is credited for $20,500 and Raul, Capital is debited for $20,500.
• C) Bill, Capital is credited for $18,500 and Bianca, Capital is debited for $18,500.
• D) Bianca, Capital is credited for $20,500 and Raul, Capital is debited for $20,500.

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Definitions:

Possession

The physical holding or control of an object or property, which may or may not be accompanied by legal ownership.

Debt

An amount of money borrowed by one party from another, typically with the obligation to pay back with interest.

Unilateral Discharge

When one party ends an agreement or contract without the need for permission from or negotiation with the other party.

Discharged

Released from an obligation, duty, or debt; in employment, it can also mean being fired or let go from a job.