With the Fixed Capital Balances Method (Method 2) of Accounting

Multiple Choice

With the fixed capital balances method (method 2) of accounting for partnership equity, the general journal entry to record interest on capital is:

A) debit profit distribution account; credit partner's capital accounts.
B) debit profit distribution account; credit partner's retained profit accounts.
C) debit profit or loss summary account; credit partner's capital accounts.
D) debit profit or loss summary account; credit partner's retained earnings accounts.