On 1 July,Herb Block Purchased the Partnership Interest of James

question 54

Multiple Choice

On 1 July,Herb Block purchased the partnership interest of James Steinfort for $40 000.The balance in Steinfort's capital account prior to the purchase was $32 000.How will this transaction be reflected on the partnership's books?

• A)Partnership will debit cash for $8 000 and credit Block's account for $40 000.
• B)Partnership will close out Steinfort's capital account for $32 000 and will open up a new capital account for Block in the same amount.
• C)No entries will be made by the partnership because the purchase is a personal transaction between the two persons and does not involve the partnership books.
• D)Partnership will close out Steinfort's account for $32 000,open Block's account for $40 000 and record a gain of $8 000.

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Definitions:

Aminopeptidase

An enzyme that removes amino acids from the amino end of proteins, playing a critical role in digestion and other processes.

Enterocytes

Specialized epithelial cells found in the lining of the small intestine, involved in the absorption of nutrients.

Polypeptides

Chains of amino acids linked by peptide bonds, forming the basic structure of proteins.