Anna and Naomi are partners.Anna has a capital balance of $49,000 and Naomi has a capital balance of $42,000.Gary invested $27,000 to acquire an ownership interest of $18,000.Which of the following is TRUE of the partnership journal entry to record the receipt of Gary's contribution? (Assume the existing partners equally divide the bonus.)

Question

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When Gary invests $27,000 for an ownership interest of $18,000, the journal entry to record this transaction involves debiting Cash for $27,000 because the partnership is receiving this amount. Gary's Capital account is credited for $18,000, reflecting his ownership interest. The difference of $9,000 represents a bonus to the existing partners, which is not directly part of this journal entry but affects the allocation of equity among the partners.

Anna and Naomi Are Partners