Wright, Bell, and Edison are partners and share income in a 2:5:3 ratio. The par

Question

Wright, Bell, and Edison are partners and share income in a 2:5:3 ratio. The partnership's capital balances are as follows: Wright $33,000, Bell $27,000, and Edison $40,000. Edison decides to withdraw from the partnership, and the partners agree not to revalue the assets upon Edison's retirement. The journal entry to record Edison's June 1 withdrawal from the partnership if Edison sells his interest to Whitney for $45,000 after the two partners approve Whitney as partner is:

Debit Edison, Capital $45,000; credit Whitney, Capital $45,000

Debit Edison, Capital $40,000; credit Cash $40,000.

Debit Edison, Capital $40,000; debit Wright, Capital $2,500; debit Bell, Capital $2,500; credit Whitney, Capital $45,000

Debit Edison, Capital $40,000; credit Whitney, Capital $40,000

Debit Edison, Capital $40,000; debit Cash $5,000; credit Whitney, Capital $45,000

Debit Edison, Capital $45,000; credit Whitney, Capital $45,000

Debit Edison, Capital $40,000; credit Cash $40,000.

Debit Edison, Capital $40,000; debit Wright, Capital $2,500; debit Bell, Capital $2,500; credit Whitney, Capital $45,000

Debit Edison, Capital $40,000; credit Whitney, Capital $40,000

Debit Edison, Capital $40,000; debit Cash $5,000; credit Whitney, Capital $45,000

Explanation / Answer

Particulars Debit Credit Edison Capital Dr. 40,000 Cash Dr. 5,000 To Whitney Capital 45,000 (being share of edison has been transferred to whitney and excess paid in

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