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Question
McCartney, Harris, and Hussin are dissolving their partnership. Their partnership agreement allocates each partner 1/3 of all income and losses. The current period's ending capital account balances are McCartney, $13,000; Harris, $13,000; and Hussin, $(2,000). After all assets are sold and liabilities are paid, there is $24,000 in cash to be distributed. Hussin is unable to pay the deficiency. The journal entry to record the distribution should be:
A.
| McCartney, Capital................................. | 8,000 | |
| Harris, Capital......................................... | 8,000 | |
| Hussin, Capital........................................ | 8,000 | |
| Cash............................................... | 24,000 |
B.
| McCartney, Capital................................. | 12,000 | |
| Harris, Capital......................................... | 12,000 | |
| Cash............................................... | 24,000 |
C.
| McCartney, Capital................................. | 13,000 | |
| Harris, Capital......................................... | 13,000 | |
| Hussin, Capital............................. | 2,000 | |
| Cash............................................... | 24,000 |
D.
| Cash......................................................... | 24,000 | |
| Hussin, Capital......................................... | 2,000 | |
| McCartney, Capital........................ | 13,000 | |
| Harris, Capital................................ | 13,000 |
E.
| Cash......................................................... | 24,000 | |
| McCartney, Capital........................ | 8,000 | |
| Harris, Capital................................ | 8,000 | |
| Hussin, Capital................................ | 8,000 |
Answer
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