Alan and Delen enter into a partnership agreement with a $10,000 capital contribution.Six months later,Delen loans Alan $1,000.The loan is a:
A)partnership capital contribution.
B)loan to the partnership,rather than to Alan.
C)loan to both the partnership and to Alan.
D)personal loan to Alan only.

Question

Quizplus · Accepted Answer

The loan from Delen to Alan is considered a personal loan to Alan only, as it is made directly to him and not to the partnership or on behalf of the partnership. This distinction is important for accounting and legal purposes, as it affects how the loan is treated in the partnership's financial statements and obligations.

Alan and Delen Enter into a Partnership Agreement with a $10,000