On January 2, Y1, Arch and Bean contribute $10,000 cash each to form the JK Partnership. Arch and Bean share profits and losses in a ratio of 50% to 50%, respectively. For Y1, the partnership's ordinary income was $40,000. In addition JK Partnership took out a loan for $20,000 and a distribution of $5,000 was made to Arch during Y1. What is Arch's basis in JK Partnership at the end of Y1? $35,000. $15,000. $25,000. O $5,000.