Wallace and Simpson Formed a Partnership with Wallace Contributing $60,000

Multiple Choice

Wallace and Simpson formed a partnership with Wallace contributing $60,000 and Simpson contributing $40,000.Their partnership agreement calls for the income (loss) division to be based on the ratio of capital investments.The partnership had income of $150,000 for its first year of operation.When the Income Summary is closed,the journal entry to allocate partner income is:

A) Debit Income Summary $150,000;credit Wallace,Capital $75,000;credit Simpson,Capital $75,000.
B) Debit Wallace,Capital $75,000;debit Simpson,Capital $75,000;credit Income Summary $150,000.
C) Debit Income Summary $150,000;credit Wallace,Capital $90,000;credit Simpson,Capital $60,000.
D) Debit Cash $150,000;credit Wallace,Capital $90,000;credit Simpson,Capital $60,000.
E) Debit Wallace,Capital $90,000;debit Simpson,Capital $60,000;credit Cash $150,000.