Edwin and Darren have decided to form a partnership. Edwin contributes $80,000 cash and merchandise inventory with a current market value of $20,000. Darren contributes $2,100 cash and office furniture with a current market value of $2,800. While journalizing this transaction:
A)Office Furniture will be debited for $1,120.
B)Office Furniture will be credited for $2,800.
C)Office Furniture will be debited for $2,800.
D)Office Furniture will be credited for $1,120.

Question

Quizplus · Accepted Answer

According to the information given, Darren has contributed office furniture with a current market value of $2,800. This means that the office furniture is an asset, which is being brought into the partnership. Therefore, we need to debit the Office Furniture account, not credit it. Option A and D are incorrect because they credit the account instead. Option B is incorrect because it suggests that the value of the office furniture is only $1,120, which is not consistent with the information given. Thus, the correct choice is C.

Edwin and Darren Have Decided to Form a Partnership