Alex,Clinton,and Evan are in a partnership.Evan decides to withdraw from the partnership by selling his interest to Linsey.Alex and Clinton agree to this.Alex's Capital account and Clinton's Capital account
A)will not be affected when Linsey is admitted
B)will decrease when Linsey is admitted
C)will increase when Linsey is admitted
D)cannot be determined from the information given

Question

Quizplus · Accepted Answer

When Linsey is admitted into the partnership by purchasing Evan's interest, Alex's and Clinton's capital accounts remain unaffected. The transaction involves Evan and Linsey, altering Evan's capital account to zero and establishing Linsey's capital account with the amount paid for Evan's interest. Alex's and Clinton's capital accounts do not change as a result of this transaction.

Alex,Clinton,and Evan Are in a Partnership