Frodo, Sam, Merry, and Pippen are in a partnership together and have a combined capital balance of $700,000. A new partner, Bilbo, pays the partnership $300,000 directly for a 1/5 interest in the new partnership. The partnership chooses the bonus method to existing partners to account for this transaction and will allocate any bonus evenly amongst the existing partners. The journal entry on the books of the partnership to account for this transaction would be:

a . Debit cash $300,000; Credit capitl-bilbo $200,000, credit each of the existing partner's capital account $25,000 each

b. debit each of the existing partner's capital account $75,000 each; credit capital-bilbo $300,000

c. debit cash $300,000; credit capital-bilbo $300,000

d. debit each of the existing partner's capital accounts $50,000 each; credit capital-bilbo $200,000