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An alternate method is for the withdrawing partner to the ownership interest to the remaining partner(s). This transaction is also private. The assets and the total equity of the partnership are not altered. An entry is made to record the change in the partnership books. If C wants to withdraw, and A and B both purchase C’s interest, the following entry would be recorded:
Although more or less than $10,000 may have been paid personally by A and B to C, the entry to transfer C’s ownership is based on the capital balance of the partnership.
The balance sheet would show the following:
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