Hewlett and Martin are partners. Hewlett's capital balance in the partnership is $55,500, and Martin's capital balance $52,500. Hewlett and Martin have agreed to share equally in income or loss. The existing partners agree to accept Black with a 20% interest. Black will invest $36,700 in the partnership. The bonus that is granted to Hewlett and Martin equals:
A. $1886 each.
B. $3670 each.
C. $3880 each.
D. 1886 to Hewlett; $1835 to Martin.
E. $0, because Hewlett and Martin actually grant a bonus to Black.
Answer: C
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