Answer:
Taylor's capital $57,500
To Income summary $25,000
To Farmer's capital $32,500
(Being the allocation of the net loss is recorded)
Explanation:
Before passing the journal entry we need to do the calculations which is shown below:
Since the net loss for the current year is $25,000
And, the amount receiver per year is $90,000
So , the total amount is
= $25,000 + $90,000
= $115,000
Now it is equally dividend i.e $57,500 each
So, the farmer amount credited by
= $90,000 - $57,500
= $32,500
And, the taylor account debited by $57,500
So, the journal entry is
Taylor's capital $57,500
To Income summary $25,000
To Farmer's capital $32,500
(Being the allocation of the net loss is recorded)
This is the answer but the same is not provided in the given options
