Mary sold Jill her equity in the Mary and Jill partnership for $23,000.If both Mary and Jill had a $15,000 capital balance,the entry to record this transaction would be to:

Question

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Mary is selling her equity in the partnership to Jill, so the $23,000 should be credited to Mary's capital account and debited from Jill's capital account. However, since both Mary and Jill have a $15,000 capital balance, a journal entry must be made to adjust their capital accounts to reflect the sale. By debiting Mary's capital account for $15,000 and crediting Jill's capital account for $15,000, the total capital balance in the partnership remains the same, and the remaining $8,000 from the sale is credited to Mary's capital account.

Mary Sold Jill Her Equity in the Mary and Jill