Michael, Angel, and Lou are partners and according to their articles of copartne
ID: 2600539 • Letter: M
Question
Michael, Angel, and Lou are partners and according to their articles of copartnership share profit and loss in the ratio of 2/3/5 . The partners' capital balances are as follows:
Michael $100,000, Angel $125,000, and Lou $150,000 . Angel decided to with draw from the partnership and the partners agree not to have the assets revalued. Assuming Angel sells his interest to DaVinny for $200,000 after both other partners approve of the admission, what likely is the journal entry:
a. Debit Angel Capital for $125,000, credit DaVinny capital for $125,000
b. Debit Angel Capital for $200,000, credit DaVinny capital for $200,000
c. Debit Angel Capital for $200,000 credit Davinny capital for $125,000 and recognize Goodwill
d. Debit Angel Capital for $75,000 and credit DaVinny Capital for $75,000
Explanation / Answer
Debit Angel Capital for $125,000, credit DaVinny capital for $125,000 Option A is correct