Katie withdrew from the partnership of Katie,Courtney,and Nathan,and accepted $15,000 cash.Her capital balance was $18,000 and the difference will be shared in a ratio of 2:1.The entry would be to:

Question

Quizplus · Accepted Answer

The withdrawal of Katie's capital balance of $18,000 is recognized by debiting Katie,Capital for $18,000 and crediting Cash for $15,000. The remaining $3,000 of Katie's capital balance will be distributed between Courtney and Nathan in a 2:1 ratio. This means Courtney will receive $2,000 and Nathan will receive $1,000. These amounts are credited to their respective capital accounts. Therefore, the entry should be to debit Katie,Capital $18,000; credit Cash $15,000; credit Courtney,Capital $2,000; credit Nathan,Capital $1,000.

Katie Withdrew from the Partnership of Katie,Courtney,and Nathan,and Accepted $15,000