Piccard is investing in a partnership with Borg. Piccard contributes equipment that originally cost $ 21,000, has a carrying amount of $ 14,000, and a fair value of $ 16,000. The entry that the partnership makes to record Piccard's initial contribution includes a
A) debit to Equipment for $ 14,000.
B) debit to Equipment for $ 21,000.
C) debit to Equipment for $ 16,000.
D) credit to Accumulated Depreciation for $ 7,000.

Question

Quizplus · Accepted Answer

The partnership should record the equipment at its fair value of $16,000, which is the amount that reflects the current market value of the asset contributed by Piccard.

Piccard Is Investing in a Partnership with Borg