On January 1, 2024, Mackus contributes land in a partnership with Williams. Mackus purchased the land in 2019 for $275,000. A real estate appraiser now values the land at $700,000. Mackus wants $700,000 capital in the new partnership, but Williams objects. Williams believes that Makus’s capital contribution should be measured by the book value of his land. Williams and Makus seek your advice.

Requirements
1. Which value of the land is appropriate for measuring Makus’s capital—book value or current market value?
2. Give the partnership’s journal entry to record Makus’s contribution in the business.