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 Badger's Capital account and for Fox's Capital account are:

A) Badger, Capital $350,000; Fox, Capital $175,000.
B) Badger, Capital $225,000; Fox, Capital $100,000.
C) Badger, Capital $225,000; Fox, Capital $75,000.
D) Badger, Capital $350,000; Fox, Capital $100,000.
E) Badger, Capital $225,000; Fox, Capital $175,000.