Chen and Wright Are Forming a Partnership

Multiple Choice

Chen and Wright are forming a partnership. Chen will invest a building that currently is being used by another business owned by Chen. The building has a market value of $90,000. Also, the partnership will assume responsibility for a $30,000 note secured by a mortgage on that building. Wright will invest $50,000 cash. For the partnership, the amounts to be recorded for the building and for Chen's Capital account are:

A) Building, $90,000 and Chen, Capital, $90,000.
B) Building, $60,000 and Chen, Capital, $60,000.
C) Building, $60,000 and Chen, Capital, $50,000.
D) Building, $90,000 and Chen, Capital, $60,000.
E) Building, $60,000 and Chen, Capital, $90,000.