The journal entry for treatment of goodwill, when a new partner brings his share of goodwill in cash and one of the old partners gains, involves the following:
(A) Gaining Partner's Capital Account is debited
(B) Premium for Goodwill Account is debited
(C) Sacrificing Partner's Capital Account is credited
(D) Gaining Partner's Capital Account is credited
Choose the correct answer from the options given below:

Correct option is B

When a new partner brings his share of goodwill in cash:
(B) The Premium for Goodwill Account is debited: The Premium for Goodwill Account is debited to account for the cash brought in for goodwill by the new partner.
(C) The amount is credited to the sacrificing partner’s capital account: The credited amount compensates the existing partners who sacrificed their share for the new partner.
(A) The gaining partner’s capital account is debited to adjust for the goodwill: The gaining partner’s capital account is debited to reflect the gain in their share due to the goodwill adjustment.