Floyd and Merriam start a partnership business on June 12,2019.Their capital account balances as of December 31,2020 stood as follows:

\begin{array} { | l | r | } \hline \text { Floyd } & \$ 54,000 \\\hline \text { Merriam } & 22,000 \\\hline\end{array}

Floyd agrees to sell half of his share to Ramelow in exchange for $32,000 cash.Which of the following is the correct journal entry in the books of the firm for the above transfer of interest?
A)

\begin{array} { |l | c | c | } \hline \text { Cash } & 32,000 & \\\hline \text { Ramelow, Capital } & & 32,000 \\\hline\end{array}

\begin{array} { | c | c | c | } \hline \text { Floyd, Capital } & 27,000 & \\\hline \text { Ramelow, Capital } & & 27,000 \\\hline\end{array}

\begin{array} { | l | c | c | } \hline \text { Cash } & 32,000 & \\\hline \text { Floyd, Capital } & 27,000 & \\\hline \text { Ramelow, Capital } & & 59,000 \\\hline\end{array}

\begin{array} { | l | r | r | } \hline \text { Cash } & 32,000 & \\\hline \text { Floyd, Capital } & & 5000 \\\hline \text { Ramelow, Capital } & & 27,000 \\\hline\end{array}

If a Partner's Capital Account Is Credited with the Amount

Multiple Choice

Correct Answer:VerifiedUnlock this answer nowGet Access to more Verified Answers free of chargeAccess For Free

Correct Answer:
Verified
Unlock this answer now
Get Access to more Verified Answers free of charge