A Partner Invests into a Partnership a Building with a $25,000

question 20

Short Answer

A partner invests into a partnership a building with a $25,000 carrying value and $40,000 fair market value. The related mortgage payable of $12,500 is assumed by the partnership. The entry to record the investment in partnership is:

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Definitions:

Accruals

An accounting practice that documents income and expenditures at the time they happen, irrespective of the timing of the associated cash transactions.

Recorded

The act of documenting transactions, changes, or events in the relevant books or databases for future reference and analysis.

Incurred

Refers to costs or expenses that have been realized or consumed in the operation of a business, often indicating that an economic event affecting the company's finances has taken place.

Depreciates

The process by which the value of an asset decreases over time, usually due to wear and tear or obsolescence.