Answer:
b)Building, $80,000 and Forman, Capital, $60,000.
Explanation:
Building is recorded as the asset with the value of $80,000. Forman capital will be recorded with value of $60,000, because he invested building with market value of $80,000 and a loan of $20,000 secured by this building. So the Net value of investment will be $60,000 (80,000-20,000).
Accounting journal entry for the transaction will be as follow:
Dr. Building (Asset Account) 80,000
Cr. Mortgage payable (Liability Account) 20,000
Cr. Forman (Capital Account) 60,000