Alex and Bailey Opened a Dance Studio Together as General

Multiple Choice

Alex and Bailey opened a dance studio together as general partners.They each invested $10,000 of their personal savings.After one year in business,they decided to close the doors.Their partnership agreement said they would divide profits and losses 50/50.They have more debt than assets.Alex and Bailey will each ________.

A) lose only $10,000, the amount they invested since they agreed to share profits and losses 50/50
B) lose only $5,000, half the amount they invested, since they agreed to share profits and losses 50/50
C) collect the debt from their former customers since the customers accepted responsibility for the business when they purchased services
D) avoid any liability for the debt since a partnership is considered to be a separate entity from the partners who own it
E) lose personal assets to repay the debt since a partnership is not considered to be a separate entity from the partners who own it