An owner investment of a building, valued at $100,000 with an $80,000 outstanding mortgage, transferring this asset into the business would:

Question

Quizplus · Accepted Answer

When the building is transferred into the business, the asset increases by the full value of $100,000, but the mortgage liability of $80,000 also transfers, resulting in a net increase in shareholders' equity of $20,000.

An Owner Investment of a Building, Valued at $100,000 with an $80,000