Journalizing Partner's Original Investment Austin Fisher contributed land, inventory, and $34,000 cash to a partnership. The land had a book value of $84,000 and a market value of $162,000. The inventory had a book value of $67,600 and a market value of $62,900. The partnership also assumed a $60,000 note payable owed by Fisher that was used originally to purchase the land.

Provide the journal entry for Fisher's contribution to the partnership.

Question

Skyler Torres

Business

30 March, 01:21

Journalizing Partner's Original Investment Austin Fisher contributed land, inventory, and $34,000 cash to a partnership. The land had a book value of $84,000 and a market value of $162,000. The inventory had a book value of $67,600 and a market value of $62,900. The partnership also assumed a $60,000 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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Fiona · Answer 1

Austin's capital:

= Market value of land + Market value of inventory + Cash - Notes payable

= $162,000 + $62,900 + $34,000 - $60,000

= $198,900

Therefore, the journal entry is as follows:

Land A/c Dr. $162,000

Inventory A/c Dr. $62,900

Cash A/c Dr. $34,000

To notes payable $60,000

To Austin's capital $198,900

(To record the contribution of Fisher to the partnership)