Chen and Wright Are Forming a Partnership

question 28

Multiple Choice

Chen and Wright are forming a partnership.Chen will invest a building that currently is being used by another business owned by Chen.The building has a fair market value of $65,000.Also,the partnership will assume responsibility for a $15,000 note secured by a mortgage on the building.Wright will invest $20,000 cash.On the books of the partnership,the amount to be recorded for the building and credit to Chen's capital account are:

• A) $65,000 and $65,000.
• B) $50,000 and $20,000.
• C) $50,000 and $40,000.
• D) $65,000 and $50,000.
• E) $20,000 and $65,000.

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