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

Question

Kyle Hancock

Business

29 July, 05:33

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

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Lena Hicks · Answer 1

Debit Credit

Cash 36,000

Land 175,000

Inventory 42,000

Accounts Payable 35,000

Austin Fisher, Capital 218,000

253,000 253,000

Explanation:

It is necessary before making the accounting entry, to determine which entry value will be given to the equity components.

The land and inventory must be valued at their market value.

It must be taken into account that there is a debt that affects the land and it must be canceled by the partnership. It will be registered on accounts payable.