Yes, the 20% reported at the end of the year for the member who sold their interest is correct for the Schedule K-1 percentage. According to the IRS Instructions for Form 1065 K-1 at this link, and copied here:
“Generally, the amounts reported in item J are based on the partnership agreement. If your interest commenced after the beginning of the partnership's tax year, the partnership will have entered, in the Beginning column, the percentages that existed for you immediately after admission. If your interest terminated before the end of the partnership's tax year, the partnership will have entered, in the Ending column, the percentages that existed immediately before termination.” (emphasis added)
The $20,000 payout to buy the partnership interest is not an expense of the partnership, but rather a transaction between the two partners (members). If the $20,000 was paid from the partnership, it is a distribution to the member who purchased the 20%. In other words, the 75% partner took a distribution of $20,000 from the partnership to buy out the 20% partner.
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