Information about this situation is cover in depth in the Advanced Training Guide under Partnership Account.

To summarize briefly:

1) The net income can be distibuted to partners equity accounts during the year by recording a journal entry.

2) The Net Income can be rolled in to Equity when beginning a new year by selecting the option.

3) After the new year has begun, the Prior Years Retained Earning can be zeroed from the Account | Change Equity Names menu. Now the starting balance for the equity accounts can be adjusted to the amount desired.