💡 A. The capital accounts of the partners should be increased by the original cost of the contributed equipment: This is incorrect because partnership accounting recognizes contributions at their fair market value (FMV) at the time of contribution, not the original cost. B. The capital accounts should be increased using a weighted average based on the current percentage of ownership: This is incorrect because capital contributions are recorded based on the individual fair value of each partner’s contribution, not a weighted average. Ownership percentages may change based on contributions but are not used to adjust capital contributions. C. No action is needed, as the capital account of each partner was increased by the correct amount: This is incorrect because the scenario suggests that each partner’s capital account was credited with only $12,500 instead of the actual fair market value of their respective contributions. If the amounts were incorrectly recorded, adjustments would be necessary. D. The capital accounts of the partners should be increased by the fair market value of their contribution: This is the correct answer because, in an equal equity partnership, each partner's capital account should be credited with the fair market value of the assets contributed. The self-declared values ($510,000 and $515,000) should be verified for FMV accuracy, and the capital accounts should reflect these values accordingly.