Barajas and Goodman admit Stein to their partnership, with Stein paying $70,000 more than the book value of Stein’s equity in the new business. Barajas and Goodman have no formal profit-and-loss-sharing agreement. What effect does admitting Stein to the partnership have on the capital balances of Barajas and Goodman?

a. Credit the Barajas and Goodman capital accounts for $35,000 each.

b. Cannot be determined because there’s no profit-and-loss-sharing ratio.

c. Debit the Barajas and Goodman capital accounts for $35,000 each.

d. Credit the Barajas and Goodman capital accounts for $70,000 each.