A partner invests into a partnership a building with a $50,000 carrying value and $80,000 fair market value.The related mortgage payable of $25,000 is not assumed by the partnership.The entry to record the investment in partnership is:

Question

Quizplus · Accepted Answer

The entry to record the investment in partnership would be to debit the partnership's building account for its fair market value of $80,000 and credit the partner's capital account for the total investment of $80,000. Therefore, the correct entry is 11ed7616_750e_4233_a7a2_518598839cfb_TB2176_11. Choice A is incorrect because it only records the carrying value of the building, which does not reflect the fair market value that the partner is contributing to the partnership. Choice C is incorrect because it assumes that the partnership also assumes the mortgage payable, which is not stated in the problem. Choice D is incorrect because it debits the partner's capital account for only the carrying value of the building and not the fair market value that the partner is contributing.

A Partner Invests into a Partnership a Building with a $50,000