When an additional partner is admitted to a partnership by contribution of assets to the partnership,

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When an additional partner is admitted to a partnership by contribution of assets, the total assets of the partnership increase. The new partner's capital account is credited for the fair value of the assets contributed, which increases the total owners' equity accounts. Liabilities can be contributed at the same time, depending on the agreement between partners. The amount of the cash contribution may or may not be the same as the amount of the debit to the new partner's capital account because it depends on the fair value of the assets contributed.

When an Additional Partner Is Admitted to a Partnership by Contribution