A partnership has three partners, Bell, Casey and Duffy, with capital balances of $50,000, $60,000, and $70,000 respectively. The partners share income equally. Duffy retires and is paid using the personal assets of Bell and Casey.

Which statement istrueconcerning the accounting for this transaction?

Select one:

A.If the total paid to Duffy is more than $70,000, implied goodwill is recognized.

B.Bell and Casey are required to pay Duffy equal amounts of personal assets, as specified in their income-sharing agreement. B is INCORRECT

C.Bell and Casey are required to pay Duffy a total of $70,000.

D.Recognition of goodwill is unlikely since there is no arm's-length transaction.