_____ at 12/31/06, Reed and Quinn Are Partners with Capital

Multiple Choice

_____ At 12/31/06, Reed and Quinn are partners with capital balances of $40,000 and $20,000, and they share profits and losses in the ratio of 2:1, respectively. On this date, Poe is admitted into the partnership. Poe invests $17,000 cash for a one-fifth interest in the capital and profit of the new partnership. Assume that goodwill is not to be recorded. The credit to be made to Poe's capital account at 12/31/06 is:

A) $12,000
B) $15,000
C) $15,400
D) $17,000
E) None of the above.