Discuss how each of the following would be recorded in the partner's capital account and why: a. Trevor invests into the partnership land that he paid $40,000 for 3 years ago. Today, the fair market value of the land is $65,000. b. Marcela invests into
the partnership a building that she paid $24,000 for 2 years ago. The building has a $10,000 mortgage and its fair market value is $18,000. The partnership assumes the mortgage. c. Courtney invests into the partnership equipment she paid $12,000 for earlier in the year by signing a note payable that the partnership is not assuming. The equipment has a fair market value of $15,000.
a. Trevor's capital account would be credited for $65,000 because that's the fair market value of the land.
b. Marcela's capital account would be credited for $8,000 because that's the difference between the fair market value of the assets invested and the liabilities assumed.
c. Courtney's capital account will be credited for $15,000 because that's the fair market value of the equipment and the partnership is not assuming the liability.
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