Peters, Chong, and Aaron are dissolving their partnership. Their partnership agreement allocates each partner an equal share of all income and losses. The current period's ending capital account balances are Peters, $84,000; Chong, $72,000; and Aaron, $(21,000). After all assets are sold and liabilities are paid, there is $135,000 in cash to be distributed. Aaron is unable to pay the deficiency. The journal entry to record the distribution should be:
Debit Cash $135,000, debit Aaron, Capital $21,000, credit Peters, Capital $84,000, credit Chong, Capital $72,000.
Debit Cash $135,000; credit Peters, Capital $45,000; credit Chong, Capital $45,000.
Debit Peters, Capital $84,000; debit Chong, Capital $51,000; credit Cash $135,000.
Debit Peters, Capital $84,000; debit Chong, Capital $72,000; credit Cash $156,000.
Debit Peters, Capital $73,500; debit Chong, Capital $61,500; credit Cash $135,000.