Wallace, Simpson, and Prince are partners and share income and losses in a 3:4:3 ratio. The partnership's capital balances are Wallace, $70,460; Simpson, $81,300; and Prince, $65,040. Royal is admitted to the partnership on July 1 with a 20% equity and invests $54,200. The partnership would record the admission of Royal into the partnership as:

• Debit Wallace, Capital $16,260; debit Simpson, Capital, $21,680; debit Prince, Capital $16,260; credit Royal, Capital $54,200.

• Debit Cash $21,680; credit Prince, Capital $21,680.

• Debit Cash $44,200; debit Wallace, Capital $3,000; debit Simpson, Capital, $4,000; debit Prince, Capital $3,000; credit Royal, Capital $54,200.

• Debit Cash $54,200; credit Royal, Capital $54,200.

• Debit Cash $54,200; credit Simpson, Capital $10,840, credit Royal, Capital $43,360.