Austin Fisher contributed land, inventory, and $36,000 cash to a partnership. The land had a book value of $120,000 and a market value of $175,000. The inventory had a book value of $50,000 and a market value of $42,000. The partnership also assumed a $35,000 note payable owed by Fisher that was used originally to purchase the land.Provide the journal entry for Fisher’s contribution to the partnership.

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Asked Dec 19, 2019
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Austin Fisher contributed land, inventory, and $36,000 cash to a partnership. The land had a book value of $120,000 and a market value of $175,000. The inventory had a book value of $50,000 and a market value of $42,000. The partnership also assumed a $35,000 note payable owed by Fisher that was used originally to purchase the land.
Provide the journal entry for Fisher’s contribution to the partnership.

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Expert Answer

Step 1

Forming a Partnership

While forming the partnership, the contribution of assets by partners are debited to the partnership assets account; whereas the liabilities of the partnerships are credi...

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