In the AD Partnership, Allen's Capital Is $140,000 and Daniel's

Multiple Choice

In the AD partnership, Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. Each of the following question is independent of the others.
Refer to the information provided above. Assume that David invests $50,000 for a one-fourth interest. Goodwill is to be recorded. The journal to record David's admission into the partnership will include:

A) a credit to cash for $50,000.
B) a debit to goodwill for $7,500.
C) a credit to David, Capital for $60,000.
D) a credit to David, Capital for $50,000.