Shaun and Rick Are Partners

Multiple Choice

Shaun and Rick are partners.Shaun has a capital balance of $9000 and Rick has a capital balance of $7000.Edwin invests a building with a current market value of $5000 to acquire an interest in the new partnership.Which of the following is true of the effect of the transaction on the balance sheet? (Assume no bonus to any partner. )

A) Both assets and equity will decrease by $5000.
B) Both assets and equity will increase by $5000.
C) Both assets and liabilities will increase by $5000.
D) Both assets and liabilities will decrease by $5000.