 In this discussion, we will discuss the discussion question of discuss how to record a partner's investment and the effect on the accounting equation. So we're talking here about the investment from a partner to the partnership, often how a partnership will start. We're going to have partners coming together. We're going to have those partners typically putting in some type of investment into the partnership in order to start the business going, put those capital investments in so that they can make purchases needed to get the business going. How do we record those initial investments? Typically, it should be if it's the most simple type of investment, which would be cash, then the owner would be putting cash from the checking account, their personal checking account to the businesses or partnership checking account. And then the partnership account then would be going up with a debit. So the cash account for the partnership would go up with a debit. So we would debit the cash account and then we would credit the capital account for the partner's investment, crediting capital for whichever partner. And the effect on the accounting equation then would be an increase to the asset, of course, because cash is now increased into the business. And the other side is really reflecting who that cash is owed to. So it's kind of like if we got a loan and you can think of it pretty similar to us getting a loan. If we got a loan from a bank, it would be a liability account, the credit to bank loan or something like that, liability. Here, the credit's going to go to the capital account, meaning that the money that was put in there is basically owed back to the owner. So you might think, well, what's the point then of doing that if we just, you know, they put cash in there and now it's owed back to the owner? Well, of course, the partnership is then going to buy stuff with the cash. And it'll still owe the money back to the owner. If it takes that money and buys equipment with it, then technically, you know, the equipment, the value of it is still kind of owed to the owner. The owner, of course, is looking not to take out the initial investment, but to generate revenue with this investment and then be drawing out money in the future based on the revenue in the future. Now, that's going to be the most simple type of initial investment. We could have some more complex initial investments. So if the partner was to put in something like equipment, that could be an initial investment as well rather than just cash. And if they put something like equipment on the books, then it would be a debit to the partnership of not cash but equipment, another type of asset. And then the credit would go once again to the capital account. The difference with equipment is, you know, the question is with equipment is always, well, what should we put the equipment on the books for? Because it's not really kind of a sale that happens at that point in time. And equipment is something that depreciates. So it's kind of a question of what's the actual value of it. And we're basically going to have the negotiated value for the equipment. So it'll go on the books for what the partners agree upon to have the negotiated value. And that's kind of like a market sale type of transaction that's happening because one partner is putting the equipment on the books and kind of negotiating with the other partners what the value of that equipment is, which is important to the partners because it'll be reflected in the partner who is putting the equipment into the company's capital account. And so the capital account will be bigger or smaller relative to the equipment investment. And therefore there's some type of negotiation and the other partners have an incentive to maybe value the equipment a little bit less to have relative capital accounts that are larger in their capital account. So there is kind of a bit of a negotiation process, even though there's not a market sale per se that happens when the equipment goes on the books. What it doesn't go on the books for is just going to be the book value that it was on the books of the partner investing. It may, but that won't be the default. It's going to go on there kind of like a new purchase as if we purchased used equipment. And so we're not typically going to have a debit to equipment and a credit to accumulated depreciation, but just put it on the books as equipment at that point in time, typically. So that's the other kind of investment. Now it isn't possible as well for the investment to be in the form of liabilities included. So for example, if an owner put a building into the business and had a related mortgage on it, a loan on it, then they could put both the building and the loan in the business. The building would be a debit increase in the assets of the business. The loan attached to it would typically be a credit that would go to the business reflecting that it would be a liability owed to some third party. And then the difference then would be increasing the capital account. Now that gets a little bit tricky when we start talking about loans because the partner that put the invest the loan on the books had 100% of the loans responsibility for paying back that loan before putting it on the books. And now that loan is kind of, they still have some responsibility, but it's going to be spread out between the other partners in some way as well. So all partners now taking responsibility in some way for the paying back of that loan amount. So and then the difference would be to the capital account. So in that case, assets would go up, liabilities would go up, and then the equity would go up for the difference between the two. Note that none of these versions have anything to do with the income statement because no time has passed, no revenue has been generated. We have received cash or some other type of asset, but not through work, not through doing revenue, but just through the capital investments. So no net income effect with the capital investments.