On July 1, 2010, a partnership was formed by Johnson and Smith. Johnson contributed cash. Smith, previously a sole proprietor, contributed property other than cash including realty subject to a mortgage, which was assumed by the partnership. Smith's capital account at July 1, 2010, should be recorded at?

A)   Smith's book value of the property at July 1, 2010

B)   Smith's book value of the property less the mortgage payable at July 1, 2010

C)   The fair value of the property less the mortgage payable at July 1, 2010

D)   The fair value of the property at July 1, 2010