Table 12-8
Jimmy, Johnny, and Joey are partners in the 3J Company sharing profits and losses equally. Joey has decided to leave the partnership. After all accounts have been updated, the capital balances of the partners are currently $90,000, $120,000, and $70,000, respectively.
-Refer to Table 12-8.Assume Joey takes $50,000 in cash and a promissory note for $30,000.The entry to record his withdrawal would NOT include:

Question

Quizplus · Accepted Answer

The entry to record Joey's withdrawal would include a debit to Joey, Capital for his current capital balance of $70,000, a credit to Cash for $50,000, and a credit to Note Payable for $30,000. However, there would be no need for a credit to Joey, Capital for $10,000 as his capital balance is already accounted for in the debit to his capital account. Therefore, the answer is D.

Table 12-8 Jimmy, Johnny, and Joey Are Partners in the 3J Company