Lily Yuan and Kayla Dunn are partners who share in the income equally and have capital balances of $180,000 and $62,500, respectively. Yuan, with the consent of Dunn, sells one-third of her interest to Rachel Burnett.
a. What entry is required by the partnership if the sales price is $40,000?
b. What entry is required by the partnership if the sales price is $80,000?