A partner invests into a partnership a building with a $50,000 carrying value and $40,000 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

Quizplus · Accepted Answer

The entry to record the investment in partnership would be to debit the building at its fair market value of $40,000 and credit the partner's capital account for the same amount. The assumption of the mortgage payable would not be recorded as part of the initial investment, but would be recorded separately if necessary.

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