On January 1, 2014, Robert Morris contributes land in a partnership with Andy Phillips. Morris purchased the

Question:

On January 1, 2014, Robert Morris contributes land in a with Andy Phillips. Morris purchased the land in 2010 for $300,000. A real estate appraiser now values the land at $700,000. Morris wants $700,000 capital in the new but Phillips objects. Phillips believes that Morris's capital contribution should be measured by the book value of his land. Phillips and Morris seek your advice.
1. Which value of the land is appropriate for measuring Morris's capital-book value or current market value?
2. Give the partnership's journal entry to record Morris's contribution in the business.
Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...