Recording Capital Contributions for Partnership : In the case of new partnerships, partners contribute assets such as land, building and cash as capital contributions to be used for operations of the business. The various assets are listed at the cost at which they are received by the partnership. This is usually the fair value or market value on the date of such contribution. The capital balances of the contributing partners are increased suitably to give effect to such capital contributions to the partnership Correct treatment for recording of capital contribution in the partners’ capital account.

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Chapter 12, Problem 3QC

To determine

Recording Capital Contributions for Partnership:

In the case of new partnerships, partners contribute assets such as land, building and cash as capital contributions to be used for operations of the business.

The various assets are listed at the cost at which they are received by the partnership. This is usually the fair value or market value on the date of such contribution.

The capital balances of the contributing partners are increased suitably to give effect to such capital contributions to the partnership

Correct treatment for recording of capital contribution in the partners’ capital account.

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