Partners A and B receive a salary of $16,000 and $14,000,respectively.They agree to share income and losses equally.If the partnership has income of $280,000 in 20x5,the entry to close the income into their capital accounts is:

Question

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Since the partnership income is $280,000, the total income to be distributed is $30,000 (equal share of $280,000). Partner A's share will be $15,000 ($16,000 salary + $15,000 share of income) and Partner B's share will be $15,000 ($14,000 salary + $15,000 share of income). To close the income into their capital accounts, we need to credit the Income Summary account for $30,000 and debit Partner A's capital account for $15,000 and Partner B's capital account for $15,000. Therefore, the correct entry is:

Income Summary     30,000
    Partner A, Capital     15,000
    Partner B, Capital     15,000

The entry in choice B matches this format.

Partners a and B Receive a Salary of $16,000 and $14,000,respectively.They