jane, castle and sean are dissolving their partnership. Their partnership agreem

Question

jane, castle and sean are dissolving their partnership. Their partnership agreement allocates

each partner and equal share of all income and losses.

the current period's ending capital account balances are

Jane, $54,000; Castle $42,000 and Sean $6,000.

After all assets are sold and liabilities are paid, there is $90,000 in cash to be distributed.

Sean is unable to pay the deficiency. the journal entry to record the distribution should be:

a. Debit cast $90,000, debit sean, Capital $6,000, credit Jane, Capital $54,000, credit Castle, Capital $42,000

b. Debit Jane, Capital $54,000; debit Castle, Capital $36,000; credit cash $90,000

c. Debit Jane, Capital $54,000; debit Castle, Capital $42,000; credit cash $96,000

d. Debit cash $90,000; credit Jane, capital $30,000; credit Castle, Capital $30,000; credit Sean, Capital $30,000.

e. Debit Jane, Capital $51,000; debit Castle, Capital $39,000; credit cash $90,000

Explanation / Answer

e. Debit Jane, Capital $51,000; debit Castle, Capital $39,000; credit cash $90,000

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