L and M are in partnership sharing profits and losses in the ratio of 3 : 2. They admit N as a partner on 1 January. On the same date the partnership net assets are revalued and show a loss on revaluation of $40 000. The new profit/loss-sharing ratio is: L 2/5, M 2/5, N1/5. 

How will the revaluation of the net assets be recorded in the partners' Capital accounts?

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A B C D L Credit 16 000 Debit 16 000 Credit 24 000 Debit 24 000 Capital accounts M Credit 16 000 Debit 16 000 Credit 16 000 Debit 16 000 N Credit 8000 Debit 8000