S.Reising contributed $48,000 in cash plus equipment valued at $73,000 to the Reising Construction Partnership.The equipment had a book value of $65,000.The journal entry to record the transaction for the partnership would include a:
A)Debit to Equipment for $73,000.
B)Debit to Equipment for $65,000.
C)Credit to S.Reising,Capital for $113,000.
D)Credit to Common Stock for $121,000
E)Credit to the Gain on Asset for $8,000.

Question

Quizplus · Accepted Answer

The partnership should record the equipment at its fair market value of $73,000, not its book value. Therefore, the journal entry would include a debit to Equipment for $73,000.

SReising Contributed $48,000 in Cash Plus Equipment Valued at $73,000