Account, 4 Nathan tong is entering into a partnership with Terrm. Nuathan is investing $2,000 cash and equipment currently on Nathan's books at $6,000 and accumulated depreciation of $1,000. The a Tair market value of $4,000. The entry to record Nathan's investment should equipment has a fair market value of entry to A debit Cash $2,000, debit Equipment $6,000, credit Accumulated $1,000, credit Long Capital $7,000 B debit Cash $2.000, debit Equipment $6,000, credit Accumulated Depreciation $2,000, credit Long Capital $6,000. C. debit Long Capital 56,000, debit Accumulated Depreciation $2,000, credit Cash $2,000, credit Equipment $6,000. D. E. debit Cash $2.000, debit Equipment $4,000, credit Long Capital $6,000 None of the above. Which of the following statements is true? A. 2. Before calculating salary and interest allowances, it is necessary to determine whether net income will cover these expenses A loss occurs when net income is not large enough to cover salary and interest allowances for the partners B. C. An interest allowance for the partners is an expense to the business. D. When a partner is added to a partnership the previous partnership ends All of the above statements are true. E. 3. Badger and Fox are forming a partnership. Badger invests a building that has a market value of $350,000; the partnership assumes responsibility for a S 125,000 note secured by a mortgage on the property. Fox invests $100,000 in cash and equipment that has a market value of $75,000. For the partnership, the amounts recorded for total assets and for total capital account are: A. Total assets $525,000; total capital $400,000. B. Total assets $400,000; total capital $400,000. C. Total assets $650,000; total capital $650,000. D. Total assets $400,000; total capital $525,000. E. Total assets $525,000; total capital $525,000. Jane and Castle are partners and share equally in income or loss. Jane's current capital balance is S 140,000 and Castle's is $130,000. Jane and Castle agree to accept Sean with a 30% interest in the partnership. Sean invests $108,000 in the partnership. The amount credited to Sean's capital account is A. $108,000. B. $102,600. 4. C. $110,500 D. $115,000. E. $113,400