After Closing the Temporary Owners' Equity Accounts into Income Summary

Multiple Choice

After closing the temporary owners' equity accounts into Income Summary, and after allocating the net income and closing the partners' drawing accounts, assume the partners' capital accounts had credit balances as follows: Peluso, $20,000; Odin, $30,000; Nazaro, $45,000. Partners share profits and losses as follows: Peluso, 20%; Odin, 30%; and Nazaro, 50%. If Peluso purchased Nazaro's interest in the partnership for $40,000 cash, the amount entered in Nazaro's capital account is a

A) $5,000 debit.
B) $40,000 debit.
C) $40,000 credit.
D) $45,000 debit.