Bob is investing in a partnership with Andy. Bob contributes as part of his initial investment, Accounts Receivable of $80,000; an Allowance for Doubtful Accounts of $12,000; and $8,000 cash. The entry that the partnership makes to record Bob's initial contribution includes a

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The partnership is recording Bob's initial contribution, which includes Accounts Receivable of $80,000 and an Allowance for Doubtful Accounts of $12,000, indicating a net realizable value of $68,000. Therefore, the debit to Accounts Receivable will be $68,000. Additionally, Bob contributes $8,000 cash, which means the partnership will credit Bob, Capital for a total of $76,000 ($68,000 + $8,000). Therefore, the correct entry is a debit to Accounts Receivable for $68,000 and a credit to Bob, Capital for $76,000.

Bob Is Investing in a Partnership with Andy