Multiple choice

A and B, who are carrying a business and sharing 3 : 2 ratio, decided to admit C as partner for 1/10th share. C brings Rs. 10,000 as his share of premium and the new ratio becomes 5 : 4 : 1. The entry for dividing premium will be to

  1. debit premium account and credit A's capital by Rs. 10,000

  2. debit premium account and credit B's capital by Rs. 10,000

  3. debit C and credit B's capital by Rs. 10,000

  4. debit C and credit A's capital by Rs. 10,000

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Since only A has made the sacrifice, so only his capital will be credited.