The DELS partnership was formed by combining individual accounting practices on May 10, 20X1. The initial investments were as follows:

Required
a. Prepare the journal entry to record the initial investments using GAAP accounting.
b. Calculate the tax basis of each partner€™s capital if Delaney, Engstrom, Lahey, and Simon agree to assume equal amounts for thepayables.

Current Value Tax Basis Delaney: Cash Building Mortgage payable, assumed by DELS $8,000 60,000 36,000 $8,000 32,000 36,000 Engstrom Cash Office furniture Note payable, assumed by DELS 9,000 23,000 10,000 9,000 17,000 10,000 Lahey: 12,000 18,000 15,000 12,000 21,000 15,000 as Computers and printers Note payable, assumed by DELS Simon Cash 21,000 7,000 21,000 5,000 Library (books and periodicals)