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10 November, 14:08

Raul and Bianca are partners. Raul has a capital balance of $50,000 and Bianca has a capital balance of $40,000. Bianca sells half of her ownership interest to Bill for $22,000. Which of the following is true of the journal entry to record this transaction?

A. Bianca, Capital is credited for $22,000 and Raul, Capital is debited for $22,000.

B. Bill, Capital is credited for $20,000 and Raul, Capital is debited for $22,000.

C. Bill, Capital is credited for $20,000 and Bianca, Capital is debited for $20,000.

D. Bianca, Capital is credited for $22,000 and Raul Capital is debited for $20,000

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Answers (1)
  1. 10 November, 15:35
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    C. Bill, Capital is credited for $20,000 and Bianca, Capital is debited for $20,000.

    Explanation:

    The journal entry to record this given transaction is shown below:

    Bianca, Capital A/c $20,000

    To Bill, Capital A/c $20,000

    (Being the ownership interest is recorded)

    The computation is shown below:

    = Bianca capital balance * percentage of ownership interest

    = $40,000 * 50%

    = $20,000

    Therefore, the correct option is c.
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