Question - Thomas and Aggy decide to form a partnership on August 1. Thomas invests the following assets and liabilities in the new partnership:
Market Value
Land $200,000
Building 350,000
Note payable 175,000
The note payable is associated with the building and the partnership will assume responsibility for the loan. Aggy invested $120,000 in cash and $195,000 in equipment in the new partnership. Prepare the journal entries to record the two partners' original investments in the new partnership.