In the JK Partnership, Jacob's Capital Is $140,000, and Katy's

Multiple Choice

In the JK partnership, Jacob's capital is $140,000, and Katy's is $40,000. They share income in a 3:2 ratio, respectively. They decide to admit Erin to the partnership. Each of the following questions is independent of the others.
-Refer to the information provided above.Assume that Erin invests $40,000 for a one-fifth interest.Goodwill is to be recorded.The journal entry to record Erin's admission into the partnership will include

A) a credit to cash for $40,000
B) a credit to Erin, Capital for $45,000
C) a credit to Erin, Capital for $40,000
D) a debit to goodwill for $4,000