When a long-lived asset is contributed to a partnership by a partner, the entry will record the fair value of the asset and the accumulated depreciation which has accumulated on it.

Question

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When a long-lived asset is contributed to a partnership by a partner, the entry records the fair value of the asset at the time of contribution, but accumulated depreciation is not recorded; instead, the asset is recorded at its fair value as if it were a new purchase by the partnership.

When a Long-Lived Asset Is Contributed to a Partnership by a Partner