Hunter, Folgers, and Tulip have been partners while sharing net income and loss in a 5:2:3 ratio. On January 31, the date Tulip retires from the partnership, the equities of the partners are Hunter, $370,000; Folgers, $259,000; and Tulip, $185,000.
Prepare journal entries to record Tulip's retirement under each of the following separate assumptions.
(1) Assume Tulip is paid $185,000 for her equity using partnership cash.