Rachael and Olivia are business partners in RO Dance. Their partnership agreement states that the partners will share income in a 3:1 ratio (Rachael; Olivia). Part of the agreement includes a salary allowance of $43,000 for Rachael and $26,000 for Olivia. For the current year, RO Dance has a net loss of $5,000. The entries to close the income summary account after allocating the loss to the partners include

Multiple Choice

a debit to Rachael, Capital $12,500 and a credit to Olivia, Capital $7,500

a credit to Rachael, Capital $12,500 and a debit to Olivia, Capital $7,500

a debit to Rachael, Capital $12,500 and a debit to Olivia, Capital $7,500

a credit to Rachael, Capital $12,500 and a credit to Olivia, Capital $7,500

None of these choices are correct.