PE 12-1B Journalize partner’s original investment

Kevin LaRoche contributed land, inventory, and $28,000 cash to a partnership. The land had a book value of $65,000 and a market value of $135,000. The inventory had a book value of $60,000 and a market value of $51,000. The partnership also assumed a $50,000 note payable owed by LaRoche that was used originally to purchase the land.

Provide the journal entry for LaRoche’s contribution to the partnership.

Answer:
Cash .................................... 28,000
Inventory............................... 51,000
Land.................................... 135,000
            Notes Payable...........................  50,000
            Kevin LaRoche, Capital.................  164,000

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