Question

Fontaine and Monroe are forming a partnership. Fontaine invests a building that has a market value of $250,000; the partnership assumes responsibility for a $75,000 note secured by a mortgage on the property. Monroe invests $100,000 in cash and equipment that has a market value of $55,000. For the partnership, the amounts recorded for the building and for Fontaine's Capital account are:

a. Building $250,000; Fontaine, Capital $250,000.b. Building $175,000; Fontaine, Capital $175,000.c. Building $250,000; Fontaine, Capital $75,000.d. Building $250,000; Fontaine, Capital $175,000.e. Building $175,000; Fontaine, Capital $75,000

Answer 1

d. Building $250,000; Fontaine, Capital $175,000

Step-by-step explanation:

the partnership should record the building at the market value of $250,000 and:

Fontaine capital = market value of the building - mortgage responsibility on the property

= $250,000 - $75,000

= $175,000