Jane, Castle, and Sean Are Partners Who Share Income and Loss

Essay

Jane, Castle, and Sean are partners who share income and loss in a 3:2:2 ratio. The partnership's capital balances are as follows: Jane, $332,000; Castle, $124,000; and Sean, $214,000. Sean decides to withdraw from the partnership, and the partners agree not to have the assets revalued upon Sean's retirement. Prepare journal entries to record Sean's withdrawal from the partnership under each of the following separate assumptions: Sean (a) sells his interest to Conner for $200,000 after Jane and Castle approve the entry of Conner as a partner; (b) is paid $214,000 in partnership cash for his equity; (c) is paid $205,000 in partnership cash for his equity; (d) is paid $220,000 in partnership cash for his equity.