The DELS partnership was formed by combining individual accounting practices on May 10, 20X1. The initial investments were as follows:

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a. Prepare the journal entry to record the initial investments, using GAAP accounting.

b. Calculate the tax basis of each partner's capital if Delaney, Engstrom, Lahey, and Simon agree to assume equal amounts for the payables.

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Current Tax Value Basis Delaney: Cash Building Mortgage payable, assumed by DELS Engstrom: $ 8,000 $ 8.000 60,000 32.000 36.000 36.000 Cash 9,000 9.000 Office furniture 23,000 17.000 Note payable, assumed by DELS 10,000 10,000 Lahey: Cash 12,000 12.000 Computers and printers 18.000 21.000 Note payable, assumed by DELS 15,000 15.000 Simon: Cash 21.000 21,000 Library (books and periodicals) 7,000 5,000