Response to the following problem:
Dean Hahn invests land in a partnership with Margo Klem. Hahn purchased the land in 20X1 for $300,000. A real estate appraiser now values the land at $400,000. Hahn wants $400,000 capital in the new partnership, but Klem objects. Klem believes that Hahn's capital contribution should be measured by the book value of his land.
Klem and Hahn seek your advice. Which value of the building is appropriate for measuring Hahn's capital, book value or current market value? State the reason for your answer. Give the partnership's journal entry to record Hahn's investment in the business.