Need Help:

Farmer and Taylor formed a partnership with capital contributions of $255,000 and $305,000, respectively. Their partnership agreement calls for Farmer to receive a $92,000 per year salary. The remaining income or loss is to be divided equally. Assuming net loss for the current year is $26,000, the journal entry to allocate the net loss is:

Multiple Choice

A. Debit Income Summary, $26,000; Credit Taylor, Capital, $13,000; Credit Farmer, Capital, $13,000.

B. Debit Income Summary, $26,000; Credit Farmer, Capital, $13,000; Credit Taylor, Capital, $13,000.

C. Debit Income Summary, $26,000; Debit Farmer, Capital, $33,000; Credit Taylor, Capital, $59,000.

D. Debit Income Summary, $26,000; DebitTaylor, Capital, $33,000; Credit Taylor, Capital, $59,000.

E. Debit Taylor, Capital, $59,000; Credit Income Summary, $26,000; Credit Farmer, Capital, $33,000.