Question

Fontaine and Monroe are forming a partnership. Fontaine invests a building that has a market value of $366,000; the partnership assumes responsibility for a $133,000 note secured by a mortgage on the property. Monroe invests $108,000 in cash and equipment that has a market value of $83,000. For the partnership, the amounts recorded for Fontaine's Capital account and for Monroe's Capital account are:

Answer 1

Answer:

FONTAINE'S CAPITAL ACCOUNT-

Particulars                               Amount$

Market value of the building      366,000

Less: Mortgage responsibility   (133,000)

on building

Capital Investment                     233,000

MONROE'S CAPITAL ACCOUNT-

Particulars                               Amount$

Cash Investment                          108,000

Add: Market value of                    83,000

equipment investment

Capital Investment                      191,000