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 assumed by the partnership.The entry to record the investment in partnership is:

Question

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The entry to record the investment in partnership is to debit the building at its fair market value of $80,000, credit the partner's capital account at the same amount, and assume the related mortgage payable of $25,000 by crediting the mortgage payable account. This is correctly represented in option B. Option A and C do not credit the mortgage payable account. Option D does not account for the building's fair market value. Therefore, option B is the best choice.

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