Badger and Fox Are Forming a Partnership

Multiple Choice

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 $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 the building and for Badger's Capital account are:

A) Building $350,000; Badger, Capital $350,000.
B) Building $225,000; Badger, Capital $225,000.
C) Building $225,000; Badger, Capital $125,000.
D) Building $350,000; Badger, Capital $225,000.
E) Building $350,000; Badger, Capital $300,000.