UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
(Mark One)
[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

         For the fiscal year ended December 31, 1998

                                       OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
         OF THE SECURITIES EXCHANGE ACT OF 1934

         For the transition period from ______________ to _______________

Commission File Number 0-16720                    Commission File Number 0-16721

                   PARTICIPATING INCOME PROPERTIES 1986, L.P.
                                       and
                     FFCA INVESTOR SERVICES CORPORATION 86-B
                     ---------------------------------------
               (Exact Name of Co-Registrants as Specified in Their
                            Organizational Documents)

      Delaware                                                 86-0570015
---------------------                                    -----------------------
(Partnership State of                                    (Partnership I.R.S.
Organization)                                            Employer Identification
                                                         No.)
      Delaware                                                  86-0557949
---------------------                                    -----------------------
(Corporation State of                                    (Corporation I.R.S.
Incorporation)                                           Employer Identification
                                                         No.)
The Perimeter Center
17207 North Perimeter Drive
Scottsdale, Arizona                                               85255
----------------------------------------                 -----------------------
(Address of Principal Executive Offices)                       (Zip Code)

Co-Registrants' telephone number, including area code:      (602) 585-4500

Securities  registered  Pursuant to Section  12(b) of the Act:  None
Securities pursuant to Section 12(g) of the Act:

                          Limited Partnership Interests
                          -----------------------------
                                (Title of Class)

                      Limited Partnership Depository Units
                      ------------------------------------
                                (Title of Class)

         Indicate by check mark  whether the  Co-Registrants  (1) have filed all
reports  required to be filed by Section 13 or 15(d) of the Securities  Exchange
Act of 1934 during the preceding 12 months (or for such shorter  period that the
Co-Registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. Yes [X]  No [ ]

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of the Co-Registrants' knowledge, in definitive proxy or information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [X]

         State  the  aggregate   market  value  of  the  voting  stock  held  by
non-affiliates of the Co-Registrants: Not applicable.

         The  limited  partnership   depository  units  (the  "Units")  are  not
currently traded in any market.  Therefore,  there is no market price or average
bid and  asked  price for the  Units  within  60 days  prior to the date of this
filing.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None
<PAGE>
                                     PART I

ITEM 1. BUSINESS.

         Participating   Income   Properties  1986,  L.P.,  a  Delaware  limited
partnership  (the  "Partnership"),  was  organized  on June 23,  1986  under the
Delaware Revised Uniform Limited  Partnership  Act. The Partnership  serves as a
co-general  partner of  FFCA/PIP  1986  Property  Company,  a  Delaware  general
partnership  (the  "Company"),  which was  organized to acquire new and existing
travel plazas, including land, buildings and equipment, to be leased to Flying J
Inc. and to franchisees of Flying J Franchise Inc. The other co-general  partner
of the Company is Perimeter Center Management Company ("PCMC").  The Partnership
invests in the travel  plazas  through  the  Company to avoid  burdensome  state
filing requirements. The Partnership is entitled to 99.9% of all of the profits,
losses  and  disbursable  cash of the  Company.  Under  the  terms of the  First
Restated  Agreement  of  Partnership  of the  Company,  PCMC is  entitled to the
remaining 0.1% of the profits,  losses and disbursable cash of the Company.  The
general  partner  of  the   Partnership  is  FFCA  Management   Company  Limited
Partnership, a Delaware limited partnership (the "General Partner").

         FFCA Investor  Services  Corporation  86-B, a Delaware  corporation and
wholly-owned  subsidiary of PCMC, which is the corporate  general partner of the
General Partner, was incorporated on June 23, 1986, to serve as the assignor and
initial  limited  partner  of the  Partnership  and the  owner of  record of the
limited  partnership  interests  in the  Partnership.  The  limited  partnership
interests are assigned by FFCA Investor  Services  Corporation 86-B to investors
in the Partnership.  FFCA Investor  Services  Corporation 86-B conducts no other
business activity.  The Partnership and FFCA Investor Services  Corporation 86-B
are referred to collectively as the "Co-Registrants."

         On October 10, 1986, the Co-Registrants  commenced a public offering of
$75,000,000  in  limited  partnership  depository  units  (the  "Units")  in the
Partnership  pursuant  to a  Registration  Statement  on  Form  S-11  under  the
Securities Act of 1933, as amended.  The  Co-Registrants  sold a total of 51,687
Units to investors at $1,000 per Unit for a total of $51,687,000.  Purchasers of
the Units  (the  "Holders")  acquired  the  following  number of Units from FFCA
Investor Services  Corporation 86-B on each of the following dates: 19,865 Units
on January 15,  1987;  and 31,822 Units on April 16,  1987.  Subsequent  to that
date, no Holder has made any additional capital contribution.  The Holders share
in the benefits of ownership of the Partnership's assets, including its interest
in the Company's real and personal property investments, according to the number
of Units  held,  in  substantially  the same  manner as limited  partners of the
Partnership.

         After deducting  organizational and offering expenses,  including sales
commissions,  the net proceeds of the offering of the Units,  $45,613,778,  were
fully invested by the Partnership,  through its investment in the Company, as of
September  1988,  in eleven  "Flying J Travel  Plazas"  located in nine  states.
"Flying J Travel Plaza"  facilities  offer a full-service  operation,  generally
including fuel facilities,  a restaurant,  convenience store and other amenities
for use by the trucking industry and traveling public in general. As of December
31, 1998,  seven of the travel plazas were leased to CFJ  Properties,  a general
partnership  formed pursuant to a joint venture  between Flying J Inc.,  through
its  subsidiary,  Big West Oil Company ("Big West"),  and Douglas Oil Company of
California,  a  subsidiary  of Conoco Inc.  ("Douglas  Oil"),  one of the travel
plazas  was  leased  to  Flying J Inc.  and the  remaining  two were  leased  to
franchisees of Flying J Franchise Inc.  ("FJFI"),  a subsidiary of Flying J Inc.
and the franchisor of Flying J Travel Plazas.  The  Partnership  and the Company
are not affiliated with CFJ Properties, Flying J Inc. or FJFI.
<PAGE>
         The Partnership  entered into purchase agreements with Flying J Inc. on
September 4, 1998 to sell  substantially all of the Partnership's  assets (those
assets comprising the travel plazas) for cash of $45,508,869 (the original sales
price of $48,534,216 for the ten travel plazas, less the Ellensburg,  Washington
travel  plaza  referred  to  below).  The  limited  partners  received a consent
solicitation  statement  describing the proposed  transaction and an affirmative
vote of investors  holding a majority of the  partnership  units was achieved on
October 26, 1998. The sale  transaction  was completed on March 22, 1999 and the
Partnership  recognized a gain of  approximately  $24.9 million on the sale. The
net cash  proceeds from this sale are being held in U.S.  government  securities
pending  distribution  to investors.  The lessee of the  Ellensburg,  Washington
travel plaza has signed a purchase agreement dated March 30, 1999 related to the
remaining  travel plaza for a sales price of $3,025,347,  which will result in a
pro forma gain of  approximately  $1.8  million.  The sale of the travel  plazas
represents the disposition of substantially all of the Partnership's  assets and
the  Partnership  has no further  liability in connection with any of the travel
plazas sold. A subordinated  real estate  disposition fee of approximately  $1.5
million will be paid to the General  Partner  related to the sales of the travel
plazas.  Upon  consummation  of the sale of the  Ellensburg,  Washington  travel
plaza, the General Partner will begin the process of winding down the affairs of
the  Partnership  that includes  liquidation  and  distribution of assets to the
investors in accordance with the Partnership  agreement.  The liquidation of the
Partnership is expected to be completed in June 1999.

         As  part of the  sale  of the  travel  plazas,  approximately  $320,000
(representing  less than one percent of the  aggregate  sales price) may, at the
General Partner's discretion,  be deposited in a trust (the "Trust Fund") with a
bank. The Trust Fund,  including interest income,  would be available to satisfy
claims made directly or indirectly with respect to the liquidation,  dissolution
and  winding up of the  affairs of the  Partnership  during a period of up to 36
months  following  the  liquidation  date.  At the  end of  this  period,  final
decisions  will be made in  settlement of all disputed  claims,  if any, and the
remaining balance of the Trust Fund will be disbursed to the investors.

         Real estate  owned by the Company at December 31, 1998 was leased for a
term of 20 years.  Lessees paid the Company  annual rental  payments (in monthly
installments)  equal to 10% of the Company's total investment in properties.  As
additional  rent, the Company was entitled to receive a portion of the operating
revenues of the lessees  equal to (a) 4% of annual gross  receipts  derived from
the travel plaza facility,  excluding fuel sales; (b) 3/10 of $.01 per gallon of
fuel sold;  and (c) 4% of all amounts  received by the lessee for any lease year
pursuant to any sublease by the lessee of any part of its leased  premises.  All
leases,  except for the lease on the Ellensburg,  Washington  travel plaza, were
terminated on March 22, 1999 upon sale of the related travel plazas.

         During 1998,  CFJ  Properties  and Flying J Inc.  together  contributed
approximately 88% of the Company's total rental and participating rental revenue
for the year.  Flying J Inc.,  through its subsidiary  Big West,  entered into a
joint venture with Douglas Oil to form CFJ Properties in February 1991. Flying J
Inc.  (and  subsidiaries)  is a fully  integrated  oil and gas  company  that is
engaged in the  production,  refining,  transportation,  wholesaling  and retail
marketing of petroleum products and other services through its travel plazas and
gasoline  stations.  Flying J Inc. operates all of CFJ Properties' travel plazas
and related facilities,  which included 78 interstate travel plaza properties as

                                       2
<PAGE>
of January 31, 1998.  As of December 31, 1998,  the Company owned seven of these
properties. With the exception of the Butte, Montana travel plaza, Flying J Inc.
assigned its  leasehold  interests in the travel  plazas owned by the Company to
CFJ Properties  and was released by the Company with respect to its  obligations
under those leases.

         The Partnership's leases with CFJ Properties were with full recourse to
the assets of CFJ Properties, but without recourse to Big West or Douglas Oil. A
default  on one  lease  constituted  a default  on all other  leases to the same
lessee by the Partnership and two other partnerships  sponsored by affiliates of
the General  Partner,  all of whose travel plazas were leased to CFJ Properties,
Flying J Inc. or franchisees of FJFI.

         For the fiscal year ended January 31, 1998, CFJ Properties reported net
income of $16 million on revenues of $1.3  billion.  Revenues  rose 7% from $1.2
billion in the prior year. The higher revenues  resulted from the opening of six
new units and increases in fuel prices.  Net income  increased from $1.8 million
in the prior year due to higher gross profit margins.

         During the fiscal year ended January 31, 1998, CFJ Properties  reported
$41.7 million in net cash  provided by operating  activities.  This cash,  along
with  the cash  provided  by  financing  activities,  was  used to make  capital
expenditures.  As of January 31, 1998, CFJ Properties  reported cash balances of
approximately  $3.8 million,  with  liquidity  supported by net cash provided by
operating activities and a $150 million revolving line of credit with a bank. As
of January 31, 1998, CFJ Properties reported partners' capital of $155.5 million
and total assets of $463.7 million.

         CFJ Properties leases travel plazas and equipment under  non-cancelable
operating leases,  which generally expire at various dates over the next 9 to 15
years.  Payments  under these leases were $17.5 million in fiscal 1998 and $17.3
million in fiscal 1997, including percentage lease payments.

         The nine  properties  operated by CFJ Properties and Flying J Inc., and
leased from the Partnership, generated a combined fuel and non-fuel gross profit
(including other income) of  approximately  $27.5 million during the fiscal year
ended January 31, 1998 as compared to $24.4  million in fiscal year 1997.  Total
travel plaza unit-level  income for these nine properties  (before  depreciation
and allocated  corporate  overhead) totaled  approximately  $2.8 million in 1998
with five of the nine  properties  reporting  positive  unit-level  income.  The
remaining four properties  reported net losses primarily due to higher expenses.
The combined result of the travel plaza  unit-level  income before  depreciation
and  allocated  corporate  overhead  was up from  $700,000 in the prior year due
largely to an increase  in fuel and  non-fuel  sales  volumes and an increase in
fuel prices.  Volumes and margins were reduced in 1997 due to CFJ's  curtailment
of its  relationship  with a third party billing  company in June 1996.  For CFJ
Properties'  fiscal year ended January 31, 1998, the average unit-level base and
participating rents approximated 14.4% of the original cost of these properties.

         Those  properties  that each  represent  over 10% of the  Partnership's
total assets at December  31, 1998 are located in Eloy,  Arizona;  Clive,  Iowa;
Truxton, Missouri; Amarillo, Texas; and Cheyenne, Wyoming.

                                       3
<PAGE>
         As of December 31, 1998, the Partnership, through its investment in the
Company,  had invested in real estate  located in nine states in the western and
central  portions  of the United  States,  and no real  estate  investments  are
located  outside of the United States.  A presentation  of revenues or assets by
geographic   region  is  not   applicable  and  would  not  be  material  to  an
understanding of the Partnership's business taken as a whole.

         The  Partnership  does not believe  that any aspect of its  business is
significantly  seasonal in nature. No portion of the  Partnership's  business is
subject to  renegotiation of profits or termination of contracts or subcontracts
at the  election  of the United  States  Government.  The  Partnership  does not
manufacture  any products and  therefore  does not require any raw  materials in
order to conduct its business.

         The  Partnership is managed by the General Partner and therefore has no
employees of its own. FFCA Investor  Services  Corporation 86-B has no employees
because it does not conduct any business operations.

         The   Partnership  has  completed  its  assessment  of  its  Year  2000
preparedness  and has determined  that any potential  consequences  of Year 2000
issues will not have a material effect on the partnership's business, results of
operation  or  financial  condition.  On March 22, 1999,  the  Partnership  sold
substantially  all of its assets to a third party. The sale of substantially all
of its assets will lead to the prompt  liquidation  of the  partnership  and the
distribution  of net  assets  to  the  limited  partners.  The  General  Partner
anticipates that the partnership  liquidation  will be accomplished  during 1999
and,  accordingly,  does not expect the  Partnership to be in existence when the
year 2000 arrives.

         The statements  contained in this Annual Report on Form 10-K, regarding
the planned dissolution and liquidation of the Partnership,  are forward-looking
statements and involve risks and  uncertainties  that could cause actual results
to  differ  materially  from  the  results,  financial  or  otherwise,  or other
expectations described in the forward-looking  statements.  Although the General
Partner  believes  that the  estimated  timing and  amounts  of the  liquidating
distributions   are  reasonable,   the  actual  costs  of  the  liquidation  and
dissolution  of the  Partnership  may vary from the estimates and that variation
could  be  material.   In  addition,   the  actual  timing  of  the  liquidating
distribution could vary from the estimate; therefore, forward-looking statements
should  not  be  relied  upon  as a  prediction  of  actual  future  results  or
occurrences.

ITEM 2. PROPERTIES.

         As of December 31, 1998, the Partnership, through its investment in the
Company,  had ten  travel  plaza  properties  located  in nine  states,  without
borrowings by the Company or the  Partnership.  The properties  were acquired by
the  Company  during  1987  and  1988  with  the net  proceeds  received  by the
Partnership from the public offering of the Units.

         On September 4, 1998, the Partnership  entered into purchase agreements
with Flying J Inc. to sell substantially all of the Partnership's  assets (those
assets comprising the travel plazas) for cash of $45,508,869 (the original sales
price of $48,534,216 for the ten travel plazas, less the Ellensburg,  Washington
travel  plaza  referred  to  below).  The  limited  partners  received a consent
solicitation  statement  describing the proposed  transaction and an affirmative
vote of investors  holding a majority of the  partnership  units was achieved in
October 1998. The sale  transaction  was completed on March 22, 1999. The lessee
of the Ellensburg, Washington travel plaza has signed a purchase agreement dated
March 30,  1999  related  to the  remaining  travel  plaza for a sales  price of
$3,025,347.  The  sale  of the  travel  plazas  represents  the  disposition  of
substantially all of the Partnership's assets and the Partnership has no further
liability in connection with the travel plazas sold.

                                       4
<PAGE>
         The  travel  plazas,   divided  into  sections  which  serve  both  the
commercial   and   non-commercial   traveler,   generally   offer  a  multi-use,
full-service  operation  including  fuel  facilities for the storage and sale of
automotive and diesel fuels, a 24-hour restaurant, a convenience store, restroom
facilities with private showers,  and other amenities designed to meet the needs
of the  trucking  industry  and the  traveling  public in  general.  Five of the
Company's  properties  represented over 10% of the Partnership's total assets at
December 31, 1998, as follows:

                                              Approximate % of
                           Location             Total Assets
                           --------             ------------
                         Eloy, Arizona              10%
                         Clive, Iowa                15%
                         Truxton, Missouri          10%
                         Amarillo, Texas            12%
                         Cheyenne, Wyoming          11%

         The following is a description of the  properties  owned by the Company
at December 31, 1998.

         BOISE,  IDAHO.  The  Boise  travel  plaza  was a  completely  renovated
full-service  travel plaza,  built on a parcel  consisting of  approximately  21
acres  approximately  1/5 of a mile south of  Interstate  84.  During 1994,  the
lessee of this travel plaza  exercised  its option to purchase the motel portion
of the  travel  plaza  comprising  two and  one-half  acres of land,  the  motel
building and motel equipment.  In addition,  approximately one-half acre of land
was sold to the  State of Idaho  Transportation  Department,  leaving  the Boise
travel plaza with  approximately  18 acres,  which was sold to CFJ Properties in
February 1998.

         POST FALLS, IDAHO. The Post Falls travel plaza is a full-service travel
plaza, built on a parcel consisting of approximately 8 acres of land, located at
the northeast off-ramp of Interstate Highway 90.

         BUTTE,  MONTANA.  The Butte travel plaza was a pre-existing Husky truck
stop,  renovated in 1988, and is located on a parcel consisting of approximately
9.01 acres of land along the north side of I-15 and I-90.

         ELLENSBURG,  WASHINGTON. The Ellensburg travel plaza was a pre-existing
Husky truck stop,  renovated in 1987,  and is located on a parcel  consisting of
approximately  8.06  acres of land just south of I-90 and one mile west of I-82.
This travel plaza is expected to be sold in April 1999.

         AMARILLO,  TEXAS.  The Amarillo  travel plaza was a pre-existing  Husky
truck stop,  renovated in 1989,  and is located on a parcel  consisting of 16.32
acres of land five  miles west of the I-27 and I-40  interchange  and four miles
east of downtown Amarillo.

                                       5
<PAGE>
         CLIVE,  IOWA.  The Clive travel plaza is a  full-service  travel plaza,
built on a parcel  consisting  of 26.6 acres of land,  located at the  southwest
corner of I-35/80. Clive, Iowa is located northwest of Des Moines.

         ELOY,  ARIZONA.  The Eloy travel plaza is a full-service  travel plaza,
built on a 15-acre parcel of land, located three miles south of the I-8 and I-10
junction.  Eloy, Arizona is located 60 miles south of Phoenix and 53 miles north
of Tucson.

         THOUSAND  PALMS,  CALIFORNIA.  The  Thousand  Palms  travel  plaza is a
full-service  travel plaza,  built on a 5.01-acre  parcel of land north of I-10.
Thousand Palms is situated midway between the Arizona/California  border and Los
Angeles.

         TRUXTON,  MISSOURI.  The Truxton travel plaza is a full-service  travel
plaza,  built on a parcel of land of approximately 15 acres located south of the
I-70 and Highway B junction.  Truxton, Missouri is located 55 miles northwest of
St. Louis.

         CHEYENNE,  WYOMING.  The Cheyenne travel plaza is a full-service travel
plaza,  built on a 15.2-acre parcel of land west of I-25.  Downtown  Cheyenne is
located three miles north of the site.

         EVANSTON,  WYOMING. The Evanston travel plaza is located on a 5.42-acre
parcel of land along the north side of Highway 30 and north of I-80. Evanston is
approximately two miles from the Utah border.

         FFCA Investor Services  Corporation 86-B has no interest in any real or
personal property independent of the Partnership.

ITEM 3. LEGAL PROCEEDINGS.

         Neither  the  Co-Registrants  nor their  properties  are parties to, or
subject to, any material pending legal proceedings.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS.

         A  proposal  to sell  substantially  all of the  Company's  assets  was
submitted to a vote of the security  holders during the fourth quarter of fiscal
year 1998. A Consent Solicitation Statement dated September 11, 1998 relating to
the proposal was sent to the security  holders.  Voting was completed on October
26,  1998  without a meeting.  The  results of the voting are as  follows:  FOR,
32,591 votes; AGAINST, 4,124 votes, and ABSTAIN, 1,354 votes.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S UNITS AND RELATED SECURITY HOLDER MATTERS.

         MARKET  INFORMATION.  During  1998,  there  was no  established  public
trading  market for the Units,  and it is not  anticipated  that an  established
public trading market for the Units will develop.

         HOLDERS.  As of March 9, 1999,  there were 4,087 record  holders of the
Units.

         DISTRIBUTIONS.  For the two most recent fiscal years,  the  Partnership
made the following cash distributions to the Holders:

                                       6
<PAGE>
                                      1998

                               Per Unit
                             Distribution              Total         Annualized
                         -------------------  --------------------      Cash
  Date of       Number   Cash from            Cash from              Yield from
Distribution   of Units  Operations  Capital  Operations   Capital   Operations
------------   --------  ----------  -------  ----------   -------   ----------
December 31     51,687    $24.80       --     $1,281,838      --        11.1%
September 30    51,687     26.45       --      1,367,121      --        11.8%
June 30         51,687     25.52       --      1,319,052      --        11.4%
March 31        51,687     26.02     $65.50    1,344,896  $3,385,499    10.8%

                                      1997

                               Per Unit
                             Distribution              Total         Annualized
                         -------------------  --------------------      Cash
  Date of       Number   Cash from            Cash from              Yield from
Distribution   of Units  Operations  Capital  Operations   Capital   Operations
------------   --------  ----------  -------  ----------   -------   ----------
December 31     51,687     $26.43        --   $1,366,087      --        11.0%
September 30    51,687      27.68        --    1,430,696      --        11.5%
June 30         51,687      26.81        --    1,385,728      --        11.2%
March 31        51,687      25.47        --    1,316,468      --        10.6%

         Cash from  operations,  defined as disbursable cash in the agreement of
limited  partnership  which  governs  the  Partnership,  is  distributed  to the
Holders.  Any variations in the amount of distributions  from quarter to quarter
are due to fluctuations in net cash provided by operating activities.  Reference
is made to Item 7 below for a discussion and analysis of such fluctuations. Cash
proceeds from the sale of property are distributed to the Holders as a return of
capital. The Adjusted Capital Contribution of a Holder is generally the Holder's
initial capital contribution reduced by the cash distributions to the Holders of
proceeds from the sale of  Partnership  properties and reduced by any other cash
distributions other than from operations.  The Adjusted Capital Contribution per
Unit of the Holders,  as defined in the agreement of limited  partnership  which
governs the  Partnership,  was $894.83 as of December 31, 1998.  At December 31,
1995,  the  Partnership  declared a return of capital of $2,050,000  ($39.66 per
Unit)  related  to the  1994  sale of the  Boise,  Idaho  lodging  premises  and
equipment,  which was  distributed  in  January  1996.  At March 31,  1998,  the
Partnership declared a return of capital of $3,385,784 ($65.50 per Unit) related
to the 1998 sale of the remainder of the Boise,  Idaho travel  plaza,  which was
distributed in April 1998. Any differences in the amounts of  distributions  set
forth in the above tables from the information contained in Item 6 below are due
to  rounding  the amount of  distributions  payable per Unit down to the nearest
whole cent and  carrying  any  fractional  cents  forward from one period to the
next.

         The Partnership  expects to make cash  distributions from operations to
the Holders  through the date of the sale of the nine travel plazas on March 22,
1999,  and on the  Ellensburg,  Washington  travel  plaza until it is sold.  The

                                       7
<PAGE>
liquidation  of the  Partnership  is expected to be completed in June 1999.  The
General   Partner   estimates  that  the   liquidating   distribution   will  be
approximately  $924 per limited  partnership unit.  Although the General Partner
believes that the amount of the  liquidating  distribution  is  reasonable,  the
actual costs of the liquidation and dissolution of the Partnership may vary from
the estimates and that variation  could be material.  As part of the sale of the
travel plazas, approximately $320,000 (representing less than one percent of the
aggregate sales price) may, at the General Partner's discretion, be deposited in
a trust (the "Trust  Fund")  with a bank.  The Trust  Fund,  including  interest
income,  would be available to satisfy  claims made directly or indirectly  with
respect to the  liquidation,  dissolution  and  winding up of the affairs of the
Partnership  during a period of up to 36 months following the liquidation  date.
At the end of this period,  final  decisions  will be made in  settlement of all
disputed  claims,  if any, and the  remaining  balance of the Trust Fund will be
disbursed to the Holders.

ITEM 6. SELECTED FINANCIAL DATA.

         The following  selected  financial  data should be read in  conjunction
with the Consolidated  Financial Statements and the related notes attached as an
exhibit to this Report.

<TABLE>
<CAPTION>
                                                   Year Ended December 31,
                                                   -----------------------
                                 1998          1997          1996          1995         1994
                                 ----          ----          ----          ----         ----
<S>                          <C>           <C>           <C>           <C>           <C>
Revenues                     $ 7,813,299   $ 6,297,173   $ 6,289,831   $ 6,563,996   $7,179,846
Net Income                     5,798,859     4,239,903     4,013,518     3,944,780    4,375,249
Net Income Per Unit               111.07         81.21         76.87         75.56        83.80
Total Assets                  24,589,017    27,480,329    28,759,012    32,378,912   34,094,240

Distributions of Cash from
 Operations to Holders         5,312,684     5,499,084     5,440,957     5,592,710    5,674,532

Distributions of Cash from
 Operations Per Unit              102.79        106.39        105.27        108.20       109.79
Return of Capital to

 Holders                       3,385,784            --            --     2,050,000           --
Return of Capital Per Unit         65.51            --            --         39.66           --
</TABLE>

         The 1994 and 1998 results of operations include gains totaling $653,477
and $1,725,741 on the sale of the motel portion of the Boise, Idaho travel plaza
in 1994 and the sale of the remainder of the travel plaza in 1998.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

LIQUIDITY AND CAPITAL RESOURCES

         The Partnership  received $51,687,000 in gross proceeds from its public
offering of the Units.  After deducting  organizational  and offering  expenses,

                                       8
<PAGE>
including sales commissions, the Partnership,  through the Company, invested the
net offering  proceeds of $45,613,778 in 11 travel plazas.  The rental  payments
from lessees of the  properties  have been the  Partnership's  primary source of
income.  As of  December  31,  1998,  the  Partnership  had cash and  marketable
securities  aggregating  $2,202,940  of  which  $1,281,838  was  paid out to the
Holders in January 1999 as their fourth quarter distribution for 1998.

         The Partnership  entered into purchase agreements with Flying J Inc. on
September 4, 1998 to sell  substantially all of the Partnership's  assets (those
assets comprising the travel plazas) for cash of $45,508,869 (the original sales
price of $48,534,216 for the ten travel plazas, less the Ellensburg,  Washington
travel  plaza  referred  to  below).  The  limited  partners  received a consent
solicitation  statement  describing the proposed  transaction and an affirmative
vote of investors  holding a majority of the  partnership  units was achieved on
October 26, 1998. The sale  transaction  was completed on March 22, 1999 and the
Partnership  recognized a gain of  approximately  $24.9 million on the sale. The
net cash  proceeds from this sale are being held in U.S.  government  securities
pending  distribution  to investors.  The lessee of the  Ellensburg,  Washington
travel plaza has signed a purchase agreement dated March 30, 1999 related to the
remaining  travel plaza for a sales price of $3,025,347,  which will result in a
pro forma gain of  approximately  $1.8  million.  The sale of the travel  plazas
represents the disposition of substantially all of the Partnership's  assets and
the  Partnership  has no further  liability in connection with any of the travel
plazas sold. A subordinated  real estate  disposition fee of approximately  $1.5
million will be paid to the General  Partner  related to the sales of the travel
plazas.  Upon  consummation  of the sale of the  Ellensburg,  Washington  travel
plaza, the General Partner will begin the process of winding down the affairs of
the  Partnership  that includes  liquidation  and  distribution of assets to the
investors in accordance with the Partnership  agreement.  The liquidation of the
Partnership is expected to be completed in June 1999.

         As  part of the  sale  of the  travel  plazas,  approximately  $320,000
(representing  less than one percent of the  aggregate  sales price) may, at the
General Partner's discretion,  be deposited in a trust (the "Trust Fund") with a
bank. The Trust Fund,  including interest income,  would be available to satisfy
claims made directly or indirectly with respect to the liquidation,  dissolution
and  winding up of the  affairs of the  Partnership  during a period of up to 36
months  following  the  liquidation  date.  At the  end of  this  period,  final
decisions  will be made in  settlement of all disputed  claims,  if any, and the
remaining balance of the Trust Fund will be disbursed to the investors.

         In February 1998, the  Partnership  sold the Boise,  Idaho travel plaza
(the Boise Plaza) to CFJ Properties  for a cash sales price of  $3,385,784.  The
Boise Plaza was a  full-service  travel plaza,  built on a parcel  consisting of
approximately 21 acres. Proceeds from the Boise Plaza sale of $65.50 per limited
partnership  unit were  distributed  to the limited  partners in April 1998 as a
partial return of their adjusted capital contribution. The Partnership accrued a
subordinated  real estate  disposition fee equal to three percent of the selling
price of the Boise Plaza (amounting to $101,574)  payable to the General Partner
of the Partnership.

         FFCA Investor  Services  Corporation 86-B has no capital  resources and
conducted no operations in 1998.

                                        9
<PAGE>
RESULTS OF OPERATIONS

FISCAL YEAR ENDED DECEMBER 31, 1998
COMPARED TO FISCAL YEAR ENDED DECEMBER 31, 1997

         The Partnership's  total revenues  increased to $7,813,299 for the year
ended  December 31, 1998 from  $6,297,173  for the year ended  December 31, 1997
primarily  due to the  gain on the  sale of the  Boise,  Idaho  travel  plaza of
$1,725,741. Participating rental revenues also increased from $1,897,489 in 1997
to  $1,935,301  in 1998 due to  higher  travel  plaza  fuel and  non-fuel  sales
volumes. Partially offsetting the increase in revenues, was a decrease in rental
revenues  due to the Boise,  Idaho  travel  plaza sale in February  1998,  which
resulted in a monthly reduction of $26,049 in rental revenue.

         Total  Partnership  expenses  for 1998  increased  to  $2,007,855  from
$2,052,340 in 1997, mainly resulting from a decrease in depreciation  expense of
$124,922  related to the sale of travel plaza  equipment.  Partially  offsetting
this  decrease  was an increase  in general  partner  fees of $82,952  primarily
resulting from the accrual of the  subordinated  real estate  disposition fee of
$101,574 related to the Boise,  Idaho travel plaza sale. Net income for 1998 was
$ 5,798,859  as compared to  $4,239,903  for 1997,  representing  an increase of
approximately 37%, primarily due to the gain on sale of property.

FISCAL YEAR ENDED DECEMBER 31, 1997
COMPARED TO FISCAL YEAR ENDED DECEMBER 31, 1996

         The Partnership's  total revenues  increased to $6,297,173 for the year
ended  December 31, 1997 from  $6,289,831  for the year ended December 31, 1996.
The overall increase in revenues is due to an increase in participating rentals.
Participating rental revenues increased to $1,897,489 in 1997 from $1,818,632 in
1996 due to higher travel plaza sales volumes. Partially offsetting the increase
in  participating  rentals,  was a decrease in rental  revenues due to a partial
land sale in the first quarter of 1996, which resulted in a monthly reduction of
$2,128 in rental revenue.

         Total  Partnership  expenses for 1997 were  $2,052,340,  representing a
decrease of approximately 10% from $2,271,611 in 1996,  primarily resulting from
a decrease in  depreciation  expense of  $243,800  related to the sale of travel
plaza  equipment  in 1996.  Net income for 1997 was  $4,239,903  as  compared to
$4,013,518 for 1996, representing an increase of approximately 6%.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         The financial  instruments  held by the  Partnership and the Company at
December 31, 1998 consist of cash  equivalents  (primarily  investments  in U.S.
Treasury  securities or repurchase  agreements that are  collateralized  by U.S.
Treasury  and  government  obligations)  and  receivables  from  lessees.  These
financial  instruments  are  short-  term  in  nature  and  do not  subject  the
Partnership or the Company to a material exposure to changes in interest rates.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         The financial statements and supporting schedules of the Co-Registrants
required by  Regulation  S-X are attached to this  Report.  Reference is made to
Item 14 below for an index to the financial  statements and financial  statement
schedules.

                                       10
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

         None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS.

         The Partnership,  the General Partner and the Company have no directors
or  executive  officers.  PCMC is the  managing  general  partner  and Morton H.
Fleischer  is the  individual  general  partner of the  General  Partner.  PCMC,
through the General Partner,  has  responsibility  for all of the  Partnership's
operations.  The  directors  and  executive  officers of PCMC and FFCA  Investor
Services Corporation 86-B are as follows:

PCMC

                                    DIRECTOR

                      Name                    Position Held Since
                      ----                    -------------------
               Morton H. Fleischer                    1993

                                    OFFICERS
                                                                    Associated
                                                                     With PCMC
       Name                          Positions Held                    Since
       ----                          --------------                    -----
Morton H. Fleischer     President and Chief Executive Officer          1993

John R. Barravecchia    Executive Vice President, Chief Financial      1993
                        Officer, Treasurer and Assistant Secretary

Christopher H. Volk     Executive Vice President, Chief Operating      1993
                        Officer, Secretary and Assistant Treasurer

Dennis L. Ruben         Executive Vice President, General Counsel      1994
                        and Assistant Secretary

Stephen G. Schmitz      Executive Vice President, Chief Investment     1995
                        Officer and Assistant Secretary

Catherine F. Long       Senior Vice President-Finance, Principal       1993
                        Accounting Officer, Assistant Secretary and
                        Assistant Treasurer

                                       11
<PAGE>
FFCA INVESTOR SERVICES CORPORATION 86-B

                                    DIRECTOR

                    Name                            Position Held Since
                    ----                            -------------------
        Morton H. Fleischer, Chairman                      1986

                                    OFFICERS

                                                                   Position Held
         Name                     Positions Held                       Since
         ----                     --------------                       -----
Morton H. Fleischer     Chairman of the Board of Directors             1986
John R. Barravecchia    President, Secretary and Treasurer             1990
Christopher H. Volk     Vice President, Assistant Secretary and        1994
                        Assistant Treasurer

         All of the foregoing directors and executive officers have been elected
to serve a one-year term and until their  successors  are elected and qualified.
There are no arrangements or understandings between or among any of the officers
or directors and any other person  pursuant to which any officer or director was
selected as such.  There are no family  relationships  among any  directors  and
officers.

BUSINESS EXPERIENCE

         The business experience during the past five years of each of the above
directors and executive officers is as follows:

         MORTON H.  FLEISCHER,  age 62, has served as a director,  President and
Chief Executive Officer of PCMC since 1993, and as Chairman of the Board of FFCA
Investor  Services  Corporation  86-B since 1986.  Mr.  Fleischer also serves as
President,  Chief  Executive  Officer  and  Chairman  of the Board of  Franchise
Finance  Corporation  of  America,  a  Delaware   corporation   ("FFCA")  having
previously  served as a  director,  President  and Chief  Executive  Officer  of
Franchise  Finance  Corporation  of America I ("FFCA I"), a predecessor of FFCA,
from 1980 to 1994. Mr. Fleischer is an individual general partner of the General
Partner,  and is a general partner (or general partner of a general  partner) of
the following public limited  partnerships:  Participating Income Properties II,
L.P.;  Participating Income Properties III Limited  Partnership;  and Scottsdale
Land Trust Limited Partnership.

         JOHN R.  BARRAVECCHIA,  age 43, has served as President,  Secretary and
Treasurer of FFCA Investor  Services  Corporation 86-B since 1990. He has served
as Chief  Financial  Officer of PCMC since 1993 and as Senior Vice President and
Treasurer  since  1994.  In 1995,  Mr.  Barravecchia  was named  Executive  Vice
President  of  PCMC.  Mr.  Barravecchia   currently  serves  as  Executive  Vice
President,  Chief Financial Officer,  Treasurer and Assistant  Secretary of FFCA
and served in various  capacities for FFCA I from 1984 to 1994. He was appointed
Vice  President  and Chief  Financial  Officer of FFCA I in December  1986,  and
Senior  Vice  President  in October  1989.  Mr.  Barravecchia  was  elected as a
director  of FFCA I in March  1993 and  Treasurer  in  December  1993.  Prior to
joining FFCA I, Mr.  Barravecchia was associated with the  international  public
accounting firm of Arthur Andersen LLP.

                                       12
<PAGE>
         CHRISTOPHER  H. VOLK, age 42, has served as Vice  President,  Assistant
Secretary and Assistant  Treasurer of FFCA Investor  Services  Corporation  86-B
since  1994,  and has served as  Secretary  of PCMC  since 1993 and Senior  Vice
President-Underwriting  and  Research  since 1994.  In 1995,  Mr. Volk was named
Executive Vice President and Chief Operating Officer of PCMC. Mr. Volk currently
serves as Executive  Vice  President,  Chief  Operating  Officer,  Secretary and
Assistant  Treasurer  of FFCA.  He joined  FFCA I in 1986 and  served in various
capacities  in FFCA I's capital  preservation  and  underwriting  areas prior to
being named Vice  President-Research  in October 1989. In December  1993, he was
appointed Secretary and Senior Vice  President-Underwriting and Research of FFCA
I, and he was elected as a director  of FFCA I in March  1993.  Prior to joining
FFCA I, Mr. Volk was employed  for six years with the National  Bank of Georgia,
where his last position was Assistant  Vice  President and Senior  Correspondent
Banking Credit Officer.

         DENNIS L.  RUBEN,  age 46,  has  served as Senior  Vice  President  and
General  Counsel  for PCMC  since  1994.  Mr.  Ruben  was named  Executive  Vice
President,  General Counsel and Assistant Secretary of PCMC in February 1997. He
currently  serves  in the same  capacity  for FFCA and  served as  attorney  and
counsel for FFCA I from 1991 to 1994. In December 1993, he was appointed  Senior
Vice President and General Counsel of FFCA I. Prior to joining FFCA I, Mr. Ruben
was  associated  with the law firm of Kutak Rock from 1980 until March 1991. Mr.
Ruben became a partner of Kutak Rock in 1984.

         STEPHEN   G.   SCHMITZ,   age   44,   has   served   as   Senior   Vice
President-Corporate  Finance of PCMC since January 1996. He was named  Executive
Vice  President,  Chief  Investment  Officer and Assistant  Secretary of PCMC in
February  1997. He currently  serves in the same capacity for FFCA.  Mr. Schmitz
served in various positions as an officer of FFCA I from 1986 to June 1, 1994.

         CATHERINE  F. LONG,  age 42, has served as Vice  President-Finance  and
Principal Accounting Officer of PCMC since 1994, and Vice President from 1993 to
1994. In February 1997 she was named Senior Vice  President-Finance of PCMC. She
currently serves as Senior Vice President-Finance, Principal Accounting Officer,
Assistant  Secretary  and  Assistant  Treasurer  of  FFCA  and  served  as  Vice
President-Finance  of FFCA I from  1990  to  1993.  In  December  1993,  she was
appointed  Principal  Accounting Officer of FFCA I. Prior to joining FFCA I, Ms.
Long was associated  with the  international  public  accounting  firm of Arthur
Andersen LLP.

COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934

         Based  solely  upon a review  of Forms 3 and 4 and  amendments  thereto
furnished  to the  Co-Registrants  during  fiscal  year  1998  and  Forms  5 and
amendments thereto furnished to the  Co-Registrants  with respect to fiscal year
ended December 31, 1998 (the "Forms"),  and any written  representations  by the
directors and executive officers of FFCA Investor Services  Corporation 86-B and
PCMC, the Co-Registrants  have not identified herein any such person that failed
to file on a timely basis the Forms  required by Section 16(a) of the Securities
Exchange Act of 1934 for fiscal year 1998.

                                       13
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION.

         The   Partnership  is  required  to  pay  an  acquisition   fee  and  a
subordinated real estate disposition fee to the General Partner, and the General
Partner is entitled to receive a share of cash  distributions,  when and as made
to the Holders,  a share of profits and losses and a  subordinated  share of any
sale  proceeds.  Reference  is made to Note  (1) and  Note  (5) of the  Notes to
Consolidated  Financial  Statements of the Partnership and the Company which are
filed with this Report for a description of the fees and  distributions  paid in
1998.

         FFCA Investor Services  Corporation 86-B serves as assignor and initial
limited partner without compensation from the Partnership. It is not entitled to
any share of the profits,  losses or cash distributions of the Partnership.  The
director and officers of FFCA Investor  Services  Corporation 86-B serve without
compensation from FFCA Investor Services Corporation 86-B or the Partnership.

         PCMC is entitled to a one-tenth of one percent share of the profits and
losses of the Company.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         As of March 9, 1999, no person or group was known by the Partnership to
own  directly  or  beneficially  more  than 5% of the  outstanding  Units of the
Partnership.

         None of the General Partner of the Partnership and its general partners
owned any Units as of March 9, 1999.  None of the  directors and officers of the
General Partner's  corporate general partner,  PCMC, owned any Units as of March
9, 1999. PCMC is owned by Morton H. Fleischer.

         FFCA  Investor  Services  Corporation  86-B  has  an  interest  in  the
Partnership as a limited  partner and it serves as the owner of record of all of
the limited partnership  interests assigned by it to the Holders.  However, FFCA
Investor  Services  Corporation  86-B has no right to vote its  interest  on any
matter and it must vote the assigned interests as directed by the Holders.  FFCA
Investor Services Corporation 86-B is a wholly-owned subsidiary of PCMC.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Since the beginning of the Co-Registrants' last fiscal year, there have
been  no  significant   transactions   or  business   relationships   among  the
Co-Registrants,  the Company,  and PCMC or their affiliates or their management,
other than as described in Items 1, 10 and 11 above.

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

     (a)  The following documents are filed as part of this Report:

          1.   FINANCIAL STATEMENTS.

               THE PARTNERSHIP AND THE COMPANY

                   Report of independent public accountants

                   Consolidated Balance Sheets as of December 31,
                   1998 and 1997

                                       14
<PAGE>
                   Consolidated Statements of Income for the years
                   ended December 31, 1998, 1997 and 1996

                   Consolidated Statements of Changes In Partners'
                   Capital for the years ended December 31, 1998,
                   1997 and 1996

                   Consolidated Statements of Cash Flows for the
                   years ended December 31, 1998, 1997 and 1996

                   Notes to Consolidated Financial Statements

                   FFCA INVESTOR SERVICES CORPORATION 86-B

                   Report of independent public accountants

                   Balance Sheet as of December 31, 1998

                   Notes to Balance Sheet

          2.   FINANCIAL STATEMENT SCHEDULES.

               Schedule III-Schedule of Real Estate and
               Accumulated Depreciation as of December 31, 1998

               All other schedules are omitted since they are not
               required,   are  inapplicable,   or  the  required
               information   is   included   in   the   financial
               statements or notes thereto.

          3.   EXHIBITS.

               The following is a complete list of exhibits filed
               as part of this Form 10-K. For  electronic  filing
               purposes only,  this report  contains  Exhibit 27,
               the  Financial  Data  Schedule.   Exhibit  numbers
               correspond  to the numbers in the Exhibit Table of
               Item 601 of Regulation S-K.

                    Pursuant to Rule 12b-32 under the  Securities
               Exchange Act of 1934,  as amended,  the  following
               document,  filed with the  Securities and Exchange
               Commission  as  Exhibit  4 to the  Co-Registrants'
               Form 10-K for the fiscal year ended  December  31,
               1989, Commission File No. 0-16720, is incorporated
               herein by this reference.

                    Second Amended and Restated  Certificate  and
                    Agreement   of  Limited   Partnership   which
                    governs  the  Partnership,  as filed with the
                    Secretary  of State of  Delaware on April 16,
                    1987.

                    Pursuant to Rule 12b-32 under the  Securities
               Exchange Act of 1934,  as amended,  the  following
               documents,  filed with the Securities and Exchange
               Commission as exhibits to the Co-Registrants' Form
               10-K for the fiscal year ended  December 31, 1986,
               Commission  File  No.  0-16720,  are  incorporated
               herein by this reference.

                                       15
<PAGE>
                                                                  1986 Form 10-K
                                                                    Exhibit No.
                                                                    -----------
                    Depositary Agreement of the Partnership.            3-C 
                                                                           
                    The   Certificate  of   Incorporation   which       3-D     
                    governs FFCA  Investor  Services  Corporation          
                    86-B, as filed with the Secretary of State of          
                    Delaware on June 23, 1986.                             
                                                                           
                    Bylaws of FFCA Investor Services  Corporation       3-E    
                    86-B.                                               
                                                                       
                    Pursuant to Rule 12b-32 under the  Securities      
               Exchange Act of 1934,  as amended,  the  following
               document,  filed with the  Securities and Exchange
               Commission  on October 8, 1986 as Exhibit 10(e) to
               the Co-Registrants' Registration Statement on Form
               S-11,  Registration  No. 33-7502,  is incorporated
               herein by this reference.

                    Operating  Agreement,  dated October 7, 1986,
                    by and among FFCA Management  Company,  L.P.,
                    FFCA/PIP 1986 Property Company, Flying J Inc.
                    and Flying J Franchise Inc.

                    Pursuant to Rule 12b-32 under the  Securities
               Exchange Act of 1934,  as amended,  the  following
               documents,  filed with the Securities and Exchange
               Commission as exhibits to the Co-Registrant's Form
               8-K dated  March  22,  1999,  Commission  File No.
               0-16720,   are   incorporated   herein   by   this
               reference.
                                                                 March 22, 1999,
                                                                    Form 8-K
                                                                   Exhibit No.
                                                                   -----------
                    Purchase  Agreement  dated as of September 4,      10.01
                    1998,  between FFCA/PIP 1986 Property Company
                    and CFJ Plaza Company III LLC

                    Purchase  Agreement  dated as of September 4,      10.02
                    1998,  between FFCA/PIP 1986 Property Company
                    and FJI Plaza Company LLC

                    Purchase  Agreement  dated as of September 4,      10.03
                    1998,  between FFCA/PIP 1986 Property Company
                    and Flying J Real  Estate  Enterprises  Inc.,
                    including the First  Amendment  thereto dated
                    as of March 22, 1999

                    Purchase  Agreement  dated as of September 4,      10.04
                    1998,  between FFCA/PIP 1986 Property Company
                    and CFJ Plaza Company II LLC

                    Purchase  Agreement  dated as of September 4,      10.05
                    1998,  between FFCA/PIP 1986 Property Company
                    and CFJ Plaza Company I LLC

                    Extension Agreement dated March 22, 1999           10.06

                    Assignment of purchase  agreement dated as of      10.07
                    March 22, 1999,  between Flying J Real Estate
                    Enterprises Inc. and FJI Plaza Company LLC

     (b)  REPORTS ON FORM 8-K.

          No reports on Form 8-K were filed by the Co-Registrants
          during  the  last  quarter  of the  fiscal  year  ended
          December 31, 1998.

                                       16
<PAGE>
                                   SIGNATURES


     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, as amended, the Partnership has duly caused this Report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                    PARTICIPATING INCOME PROPERTIES 1986, L.P.

                                    By: FFCA MANAGEMENT COMPANY LIMITED
                                        PARTNERSHIP, General Partner


Date:  April 8, 1999                By /s/ Morton H. Fleischer
                                      ----------------------------------------
                                      Morton H. Fleischer, General Partner

                                    By: PERIMETER CENTER MANAGEMENT COMPANY,
                                        Corporate General Partner


Date:  April 8, 1999                By /s/ Morton H. Fleischer
                                      ----------------------------------------
                                      Morton  H.  Fleischer,  President  and
                                      Chief Executive Officer

     Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf of
the Partnership and in the capacities and on the dates indicated.

     SIGNATURES OF REQUIRED OFFICERS AND DIRECTORS OF PERIMETER CENTER
     MANAGEMENT COMPANY,  CORPORATE GENERAL PARTNER OF FFCA MANAGEMENT
     COMPANY LIMITED  PARTNERSHIP,  GENERAL  PARTNER OF  PARTICIPATING
     INCOME PROPERTIES 1986, L.P.


Date:  April 8, 1999                By /s/ Morton H. Fleischer
                                       ----------------------------------------
                                       Morton  H.  Fleischer, President, Chief
                                       Executive Officer and Director


Date:  April 8, 1999                By /s/ John Barravecchia
                                      -----------------------------------------
                                      John  Barravecchia, Executive Vice
                                      President, Chief Financial Officer,
                                      Treasurer and Assistant Secretary


Date:  April 8, 1999                By /s/ Catherine F. Long
                                      -----------------------------------------
                                      Catherine  F. Long, Senior Vice President-
                                      Finance, Principal Accounting Officer,
                                      Assistant Secretary and Assistant
                                      Treasurer

                                       17
<PAGE>
     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, as amended,  the Co-Registrant has duly caused this Report
to be signed on its behalf by the undersigned, thereunto duly authorized.

                                    FFCA INVESTOR SERVICES CORPORATION 86-B


Date:  April 8, 1999                By /s/ Morton H. Fleischer
                                      -----------------------------------------
                                      Morton H. Fleischer, Sole Director


Date:  April 8, 1999                By /s/ John Barravecchia
                                      -----------------------------------------
                                      John Barravecchia, President, Secretary,
                                      Treasurer, Principal Financial Officer and
                                      Principal Accounting Officer

                                       18
<PAGE>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To Participating Income Properties 1986, L.P.:


We have audited the  accompanying  consolidated  balance sheets of PARTICIPATING
INCOME  PROPERTIES 1986, L.P. (a Delaware limited  partnership) and affiliate as
of  December  31,  1998 and 1997,  and the related  consolidated  statements  of
income,  changes in partners' capital and cash flows for each of the three years
in the period ended  December  31,  1998.  These  financial  statements  and the
schedule referred to below are the  responsibility of the partnership's  general
partner.  Our  responsibility  is to  express  an  opinion  on  these  financial
statements and schedule based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Participating Income Properties
1986,  L.P. and  affiliate as of December 31, 1998 and 1997,  and the results of
their  operations and their cash flows for each of the three years in the period
ended  December 31, 1998,  in  conformity  with  generally  accepted  accounting
principles.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial  statements  taken  as a  whole.  The  schedule  of  Real  Estate  and
Accumulated  Depreciation  is  presented  for  purposes  of  complying  with the
Securities  and  Exchange  Commission's  rule and is not a required  part of the
basic  financial  statements.  This schedule has been  subjected to the auditing
procedures  applied in our audits of the basic financial  statements and, in our
opinion,  is fairly  stated in all  material  respects  in relation to the basic
financial statements taken as a whole.

                                               /s/ Arthur Andersen LLP

Phoenix, Arizona,
  March 22, 1999.

                                      19
<PAGE>
            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE

            CONSOLIDATED BALANCE SHEETS - DECEMBER 31, 1998 AND 1997


                                                       1998            1997
                                                   ------------    -----------
                                     ASSETS

CASH AND CASH EQUIVALENTS                          $ 2,202,940    $ 2,402,680

RECEIVABLES FROM LESSEES                               146,270        161,608

SECURED NOTES RECEIVABLE                                66,595        100,569

DEFERRED COSTS (Note 6)                                208,904             --

PROPERTY SUBJECT TO OPERATING LEASES (Note 3)       21,964,308     24,815,472
                                                   -----------    -----------

       Total assets                                $24,589,017    $27,480,329
                                                   ===========    ===========

                       LIABILITIES AND PARTNERS' CAPITAL

DISTRIBUTION PAYABLE TO LIMITED PARTNERS           $ 1,282,310    $ 1,366,497

PAYABLE TO GENERAL PARTNER                             177,582             --

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES                20,328         52,297

RENTAL DEPOSITS                                        114,400        114,400
                                                   -----------    -----------

       Total liabilities                             1,594,620      1,533,194
                                                   -----------    -----------

MINORITY INTEREST (Note 1)                             (15,705)       (16,239)
                                                   -----------    -----------
PARTNERS' CAPITAL (DEFICIT):
   General partner                                    (166,879)      (171,205)
   Limited partners                                 23,176,981     26,134,579
                                                   -----------    -----------

       Total partners' capital                      23,010,102     25,963,374
                                                   -----------    -----------

       Total liabilities and partners' capital     $24,589,017    $27,480,329
                                                   ===========    ===========


                 The accompanying notes are an integral part of
                       these consolidated balance sheets.

                                       20
<PAGE>
            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE

                        CONSOLIDATED STATEMENTS OF INCOME
              FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996


                                               1998         1997         1996
                                            ----------   ----------   ----------
REVENUES:
   Rental                                   $4,020,124   $4,288,989   $4,295,373
   Participating rentals                     1,935,301    1,897,489    1,818,632
   Interest and other                          132,133      110,695       99,868
   Gain on sale of property                  1,725,741           --       75,958
                                            ----------   ----------   ----------

                                             7,813,299    6,297,173    6,289,831
                                            ----------   ----------   ----------
EXPENSES:
   General partner fees  (Note 5)              632,311      549,359      543,553
   Depreciation                              1,191,121    1,316,043    1,559,843
   Operating                                   184,423      186,938      168,215
                                            ----------   ----------   ----------

                                             2,007,855    2,052,340    2,271,611
                                            ----------   ----------   ----------

MINORITY INTEREST IN INCOME  (Note 1)            6,585        4,930        4,702
                                            ----------   ----------   ----------

NET INCOME                                  $5,798,859   $4,239,903   $4,013,518
                                            ==========   ==========   ==========

NET INCOME ALLOCATED TO  (Note 1):
   General partner                          $   57,989   $   42,399   $   40,135
   Limited partners                          5,740,870    4,197,504    3,973,383
                                            ----------   ----------   ----------

                                            $5,798,859   $4,239,903   $4,013,518
                                            ==========   ==========   ==========
NET INCOME PER LIMITED PARTNERSHIP
   UNIT (based on 51,687 units held by
   limited partners)                        $   111.07   $    81.21   $    76.87
                                            ==========   ==========   ==========

                 The accompanying notes are an integral part of
                         these consolidated statements.

                                       21
<PAGE>
            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE

             CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
              FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996


                                       General        Limited
                                       Partner        Partners         Total
                                       -------        --------         -----

BALANCE,  December 31, 1995          $(143,234)     $28,903,733     $28,760,499

   Net income                           40,135        3,973,383       4,013,518

   Distributions to partners,
      cash from operations             (54,959)      (5,440,957)     (5,495,916)
                                     ---------      -----------     -----------

BALANCE,  December 31, 1996           (158,058)      27,436,159      27,278,101

   Net income                           42,399        4,197,504       4,239,903

   Distributions to partners,
      cash from operations             (55,546)      (5,499,084)     (5,554,630)
                                     ---------      -----------     -----------

BALANCE,  December 31, 1997           (171,205)      26,134,579      25,963,374

   Net income                           57,989        5,740,870       5,798,859

   Distributions to partners,
      cash from operations             (53,663)      (5,312,684)     (5,366,347)

   Return of capital to limited
      partners (Note 1)                     --       (3,385,784)     (3,385,784)
                                     ---------      -----------     -----------

BALANCE,  December 31, 1998          $(166,879)     $23,176,981     $23,010,102
                                     =========      ===========     ===========

                 The accompanying notes are an integral part of
                         these consolidated statements.

                                       22
<PAGE>
            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

                                              1998         1997         1996
                                          -----------  -----------  -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                               $ 5,798,859  $ 4,239,903  $ 4,013,518
 Adjustments to net income:
  Depreciation                              1,191,121    1,316,043    1,559,843
  Gain on sale of property                 (1,725,741)          --      (75,958)
  Minority interest in income                   6,585        4,930        4,702
  Change in assets and liabilities:
   Decrease (increase) in receivables
    from lessees                               15,338      (11,805)      (5,620)
   Increase in deferred costs                (208,904)          --           --
   Increase (decrease) in payable to
    general partner                           177,582      (10,304)      (7,401)
   Increase (decrease) in accounts
     payable and accrued liabilities          (31,969)       2,593      (11,384)
                                          -----------  -----------  -----------
      Net cash provided by operating
       activities                           5,222,871    5,541,360    5,477,700
                                          -----------  -----------  -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Proceeds from sale of property             3,385,784           --      811,441
 Principal collections on secured notes
  receivable                                   33,974       30,754       26,588
                                          -----------  -----------  -----------
      Net cash provided by investing
       activities                           3,419,758       30,754      838,029
                                          -----------  -----------  -----------
CASH FLOWS FOR FINANCING ACTIVITIES:
 Partner distributions declared (Note 1)   (5,366,347)  (5,554,630)  (5,495,916)
 Return of capital to limited partners
  declared (Note 1)                        (3,385,784)          --           --
 Increase (decrease) in distribution
  payable                                     (84,187)      45,071   (2,117,230)
 Distributions to minority interest            (6,051)      (6,246)      (6,189)
                                          -----------  -----------  -----------
      Net cash used in financing
       activities                          (8,842,369)  (5,515,805)  (7,619,335)
                                          -----------  -----------  -----------
NET INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS                            (199,740)      56,309   (1,303,606)

CASH AND CASH EQUIVALENTS, beginning
 of year                                    2,402,680    2,346,371    3,649,977
                                          -----------  -----------  -----------
CASH AND CASH EQUIVALENTS, end
 of year                                  $ 2,202,940  $ 2,402,680  $ 2,346,371
                                          ===========  ===========  ===========

                 The accompanying notes are an integral part of
                         these consolidated statements.

                                       23
<PAGE>
            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE

                   Notes to Consolidated Financial Statements
                           December 31, 1998 and 1997

1) ORGANIZATION:

         Participating Income Properties 1986, L.P. (the Partnership) was formed
on June 23, 1986 under the Delaware Revised Uniform Limited Partnership Act. The
Partnership  invests as a co-general  partner with Perimeter  Center  Management
Company (PCMC) in FFCA/PIP 1986 Property Company, a Delaware general partnership
(the  Property  Company).  The  general  partner  of  the  Partnership  is  FFCA
Management Company Limited  Partnership (the General Partner) of which PCMC is a
general partner. The Property Company was organized to purchase new and existing
"Flying J Travel Plaza" facilities,  including land,  buildings and equipment to
be leased on a net basis to Flying J Inc.  and certain  franchisees  of Flying J
Franchise Inc. At December 31, 1998, seven of the ten travel plazas owned by the
Partnership  (eight of the eleven  properties  owned at December  31, 1997) were
leased to CFJ Properties  (CFJ), an affiliate of Flying J Inc. (one property was
sold in 1998).  One of the travel plazas was leased to Flying J Inc. in 1998 and
1997 and the  remaining  two were leased to  franchisees  that operate  Flying J
Travel  Plazas.   "Flying  J  Travel  Plaza"  facilities  offer  a  full-service
operation, generally including fuel facilities, a restaurant,  convenience store
and other  amenities for use by the trucking  industry and  traveling  public in
general.  The Partnership and the Property Company will expire December 31, 2029
and 2028, respectively,  or sooner (see Note 6), in accordance with the terms of
their respective partnership agreements.

         Investors acquired units of assigned limited partnership  interest (the
limited  partnership  units)  in the  Partnership  from FFCA  Investor  Services
Corporation  86-B  (the  Initial  Limited  Partner),   a  Delaware   corporation
wholly-owned by PCMC. Holders of the units have all of the economic benefits and
substantially  the same rights and powers of limited partners;  therefore,  they
are referred to herein as "limited partners."

         The Partnership agreement provides for allocation of profits and losses
and cash distributions among its partners as follows:

         Profits and Losses: Allocated 99% to the limited partners and 1% to the
         General Partner.

         Cash Distributions: All cash from operations, as defined, after payment
         of fees to the General Partner is allocated 99% to the limited partners
         and 1% to the General Partner.  Cash proceeds from the sale of property
         are  not  considered  cash  from  operations  but,  when   distributed,
         represent a partial return of the limited  partners' initial $1,000 per
         unit capital  contribution.  There have been two such  distributions to
         date, therefore, the limited partner Adjusted Capital Contribution,  as
         defined in the Partnership  agreement,  at December 31, 1998 is $894.83
         per unit.

         The following is a reconciliation  of net income to cash  distributions
from operations as defined in the Partnership agreement:

                                           1998          1997          1996
                                        -----------   -----------   -----------
   Net income                           $ 5,798,859    $4,239,903    $4,013,518
   Adjustments to reconcile net income
    to cash distributions declared:
    Depreciation                          1,191,121     1,316,043     1,559,843
    Gain on sale of property             (1,725,741)           --       (75,958)
    Accrued disposition fee to
      General Partner (Note 5)              101,574            --            --
    Change in minority interest                 534        (1,316)       (1,487)
                                        -----------    ----------    ----------
      Cash distributions declared
        from operations                 $ 5,366,347    $5,554,630    $5,495,916
                                        ===========    ==========    ==========

                                       24
<PAGE>
         The Property Company  agreement  provides for allocation of profits and
losses and cash distributions among its partners as follows:

         Profits and Losses: Allocated 99.9% to the Partnership and .1% to PCMC.
         Cash Distributions:  All cash from operations, as defined, is allocated
         99.9% to the Partnership and .1% to PCMC.

2) SIGNIFICANT ACCOUNTING POLICIES:

         CONSOLIDATION AND FINANCIAL STATEMENTS - The accompanying  consolidated
financial  statements  include the accounts of the  Partnership and the Property
Company in which the Partnership holds a substantial  interest,  as discussed in
Note 1.  All  significant  intercompany  accounts  and  transactions  have  been
eliminated in consolidation.  The consolidated financial statements are prepared
on the accrual basis of accounting.  The preparation of the financial statements
in conformity with generally accepted accounting  principles requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses during the reporting period.  Although management believes
its estimates are reasonable, actual results could differ from those estimates.

         CASH AND CASH  EQUIVALENTS  -  Investment  securities  that are  highly
liquid and have  maturities  of three months or less at the date of purchase are
classified as cash equivalents.  Cash equivalents include United States Treasury
securities  of  $1,560,172  and  $2,091,603  at  December  31,  1998  and  1997,
respectively, and bank repurchase agreements (which are collateralized by United
States  Treasury and Government  obligations)  of $350,093 at December 31, 1998.
Short-term  investments  are  recorded  at cost  plus  accrued  interest,  which
approximates market value.

         LEASES - The Partnership leases its property under long-term net leases
which are classified as operating  leases.  Rental revenue from operating leases
is recognized as it is earned.

         DEPRECIATION  -  Depreciation   on  buildings  is  provided  using  the
straight-line method based upon an estimated useful life of 24 years.  Equipment
is  depreciated  over an estimated  useful life of eight  years,  assuming a 10%
salvage  value at the end of its useful life.  The cost of  properties  includes
miscellaneous acquisition and closing costs.

3) PROPERTY SUBJECT TO OPERATING LEASES:

         The following is an analysis of the Partnership's  investment, at cost,
in property  subject to operating leases by major class at December 31, 1998 and
1997:

                                                  1998          1997
                                              -----------   -----------
         Land                                 $ 5,766,190   $ 6,773,272
         Buildings                             28,456,079    29,669,322
         Equipment                                626,781       626,781
                                              -----------   -----------
                                               34,849,050    37,069,375
         Less - Accumulated depreciation       12,884,742    12,253,903
                                              -----------   -----------

                                              $21,964,308   $24,815,472
                                              ===========   ===========

         Lease agreements provide for monthly base rentals equal to a percentage
of the  property's  cost. As additional  rent, the Property  Company  receives a
portion of the  operating  revenues of the lessee equal to a percentage of gross
receipts  (participating  rentals) from travel plaza  facilities and fuel sales.
The terms of the leases are eight years for  equipment and 20 years for land and
buildings.  During  the year ended  December  31,  1998,  CFJ and Flying J Inc.,
accounting for 88% of total rental and participating rental revenue,  operated a
total of nine Partnership  properties in Idaho,  Montana,  California,  Arizona,
Iowa, Missouri,  Texas and Wyoming.

                                       25
<PAGE>
Scheduled  minimum  future  rentals  (excluding   participating  rentals)  under
noncancellable operating leases as of December 31, 1998, are $4 million per year
through the year 2007.

         All of the  Partnership's  property  comprising  the travel  plazas was
subject to  agreements  entered  into with Flying J Inc. on September 4, 1998 in
which Flying J Inc. agreed to buy the property  (subject to certain  conditions)
for cash totaling  approximately $48.5 million (see Note 6). The Partnership was
the  beneficiary of a letter of credit from CFJ in the amount of $599,304 (to be
used as security  for CFJ's lease  payments),  which was released on the date of
sale.

         The General Partner,  the Property Company,  Flying J Inc. and Flying J
Franchise  Inc.  have  entered into an  operating  agreement.  In the event of a
default in the payment of any amount due and payable under the lease agreements,
and upon the General  Partner's  written  request and delivery of the defaulting
lessee's  property to Flying J Inc.,  Flying J Inc.  has agreed to operate  such
defaulted lessee's property for the maximum potential lease term.

4) INCOME TAXES:

         The Partnership is not directly subject to income taxes;  rather,  each
partner is subject to income taxes on his distributable share of taxable income.
The Partnership tax returns and the amount of distributable  partnership profits
or losses are subject to examination by Federal and state taxing authorities. If
examinations  by  taxing   authorities   result  in  changes  to   distributable
partnership  profits or losses,  the tax  liabilities  of the partners  could be
changed accordingly.

         The following is a reconciliation of net income for financial reporting
purposes to income  reported for Federal income tax purposes for the years ended
December 31, 1998, 1997 and 1996:
                                             1998          1997         1996
                                          ----------    ----------   ----------
         Net income for financial
           reporting purposes             $5,798,859    $4,239,903   $4,013,518
         Differences for tax purposes in:
           Depreciation                      460,584       554,950      765,189
           Gain on sale and other           (192,300)           --       17,534
                                          ----------    ----------   ----------

         Taxable income to partners       $6,067,143    $4,794,853   $4,796,241
                                          ==========    ==========   ==========

For  Federal  income tax  reporting  purposes,  taxable  income to  partners  is
reported  on the  accrual  basis of  accounting  and is  classified  as ordinary
income.

         At December 31,  1998,  the tax bases of the  Partnership's  assets and
liabilities  exceed the amounts  recorded for  financial  reporting  purposes by
$4,956,709.  This  difference  results  primarily  from  the  use  of  different
depreciation methods for financial reporting and tax reporting purposes.

5) TRANSACTIONS WITH RELATED PARTIES:

         Under the terms of the  Partnership  agreement,  the General Partner is
entitled to  compensation  for certain  services  performed in  connection  with
managing the affairs of the  Partnership.  During 1998, 1997 and 1996, fees paid
to the General Partner were as follows:

                                           1998           1997           1996
                                         --------       --------       --------

         Disbursable cash fee            $530,737       $549,359       $543,553
         Subordinated real estate
           disposition fee                101,574             --             --
                                         --------       --------       --------

                                         $632,311       $549,359       $543,553
                                         ========       ========       ========

                                       26
<PAGE>
         The  disbursable  cash  fee  equals  9% of  all  cash  received  by the
Partnership (excluding sale proceeds) less Partnership operating expenses,  only
to the  extent  the  limited  partners  have  received  an  annual  return of 9%
(calculated  quarterly) on their Adjusted Capital  Contribution,  as defined.  A
subordinated  real estate  disposition fee equal to three percent of the selling
price on the disposition of any real property  (subject to certain  limitations)
is payable to the General Partner only after the limited  partners have received
an amount  equal to their  Adjusted  Capital  Contribution,  as  defined,  and a
cumulative,  non-compounded  return of 10% per annum on their  Adjusted  Capital
Contribution.  A subordinated real estate  disposition fee amounting to $101,574
has been accrued by the  Partnership  representing  three percent of the selling
price of the Boise,  Idaho travel  plaza,  which was sold in February 1998 for a
cash sales price of $3,385,784.

         An affiliate of the General  Partner  incurs  expenses on behalf of the
Partnership for maintenance of the books and records and for computer,  investor
and  legal  services   performed  for  the   Partnership.   These  expenses  are
reimbursable in accordance with the Partnership  agreement and are less than the
amount  that  the  Partnership  would  have  paid  to  independent  parties  for
comparable services.  The Partnership  reimbursed the affiliate $67,381 in 1998,
$35,018 in 1997 and $30,001 in 1996 for such expenses.

6) SUBSEQUENT EVENT - SALE OF SUBSTANTIALLY ALL ASSETS:

         The Partnership  entered into purchase agreements with Flying J Inc. on
September 4, 1998 to sell  substantially all of the Partnership's  assets (those
assets comprising the travel plazas) for cash of $45,508,869 (the original sales
price of $48,534,216 for the ten travel plazas, less the Ellensburg,  Washington
travel  plaza  referred  to  below).  The  limited  partners  received a consent
solicitation  statement  describing the proposed  transaction and an affirmative
vote of investors  holding a majority of the  partnership  units was achieved on
October 26, 1998. The sale  transaction  was completed on March 22, 1999 and the
Partnership  recognized a gain of  approximately  $24.9 million on the sale. The
net cash  proceeds from this sale are being held in U.S.  government  securities
pending  distribution  to investors.  The lessee of the  Ellensburg,  Washington
travel plaza has signed a purchase agreement dated March 30, 1999 related to the
remaining  travel plaza for a sales price of $3,025,347,  which will result in a
pro forma gain of  approximately  $1.8  million.  The sale of the travel  plazas
represents the disposition of substantially all of the Partnership's  assets and
the  Partnership  has no further  liability in connection with any of the travel
plazas sold. A subordinated  real estate  disposition fee of approximately  $1.5
million will be paid to the General  Partner  related to the sales of the travel
plazas.  Upon  consummation  of the sale of the  Ellensburg,  Washington  travel
plaza, the General Partner will begin the process of winding down the affairs of
the  Partnership  that includes  liquidation  and  distribution of assets to the
investors in accordance with the Partnership  agreement.  The liquidation of the
Partnership is expected to be completed in June 1999.

         As  part of the  sale  of the  travel  plazas,  approximately  $320,000
(representing  less than one percent of the  aggregate  sales price) may, at the
General Partner's discretion,  be deposited in a trust (the "Trust Fund") with a
bank. The Trust Fund,  including interest income,  would be available to satisfy
claims made directly or indirectly with respect to the liquidation,  dissolution
and  winding up of the  affairs of the  Partnership  during a period of up to 36
months  following  the  liquidation  date.  At the  end of  this  period,  final
decisions  will be made in  settlement of all disputed  claims,  if any, and the
remaining balance of the Trust Fund will be disbursed to the limited partners.

                                       27
<PAGE>
                                                                    SCHEDULE III
                                                                     Page 1 of 2

            PARTICIPATING INCOME PROPERTIES 1986, L. P. AND AFFILIATE
              SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION
                             AS OF DECEMBER 31, 1998


                                     Initial Cost to Partnership and
                                    Gross Amount at December 31, 1998
                               -------------------------------------------

Travel Plaza Location          Land       Buildings   Equipment     Total
---------------------          ----       ---------   ---------     -----
Eloy, Arizona               $  458,740  $ 3,558,260  $      --  $ 4,017,000
Thousand Palms, California     809,050    2,757,950         --    3,567,000
Post Falls, Idaho              351,320    1,818,680         --    2,170,000
Clive, Iowa                    307,250    6,191,750         --    6,499,000
Truxton, Missouri              403,600    3,803,400         --    4,207,000
Butte, Montana                 242,710    1,631,290    259,000    2,133,000
Amarillo, Texas              1,326,000    2,814,000         --    4,140,000
Ellensburg, Washington         533,040    1,266,113         --    1,799,153
Evanston, Wyoming              622,640    1,188,476    367,781    2,178,897
Cheyenne, Wyoming              711,840    3,426,160         --    4,138,000
                            ----------  -----------  ---------  -----------

TOTAL                       $5,766,190  $28,456,079  $ 626,781  $34,849,050
                            ==========  ===========  =========  ===========


                                  Accumulated Depreciation
                              ---------------------------------
                                                                       Date
Travel Plaza Location         Buildings    Equipment      Total      Acquired
---------------------         ---------    ---------      -----      --------
Eloy, Arizona               $ 1,544,384   $      --   $ 1,544,384    Aug. 1988
Thousand Palms, California    1,206,603          --     1,206,603    Jul. 1988
Post Falls, Idaho               909,340          --       909,340    Jan. 1987
Clive, Iowa                   2,708,891          --     2,708,891    Jul. 1988
Truxton, Missouri             1,663,988          --     1,663,988    Jul. 1988
Butte, Montana                  745,466     233,099       978,565    Jul. 1987
Amarillo, Texas               1,108,821          --     1,108,821    Jun. 1988
Ellensburg, Washington          562,681          --       562,681    Sep. 1987
Evanston, Wyoming               346,639     367,781       714,420    Dec. 1987*
Cheyenne, Wyoming             1,487,049          --     1,487,049    Aug. 1988
                            -----------   ---------   -----------

TOTAL                       $12,283,862   $ 600,880   $12,884,742
                            ===========   =========   ===========

* Restaurant reconstructed during 1991

                                       28
<PAGE>
                                                                    SCHEDULE III
                                                                     Page 2 of 2

            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE
              SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION
                             AS OF DECEMBER 31, 1998

NOTES:

(1)      There are no encumbrances on the properties. The properties are subject
         to a purchase  agreement  whereby Flying J Inc. has agreed,  subject to
         certain  conditions,  to purchase the  properties for an aggregate cash
         price of approximately $48.5 million.

(2)      Cost for Federal  income tax purposes is the same as cost for financial
         reporting purposes.

(3)      All buildings and equipment are depreciated over estimated useful lives
         of 24 and eight years, respectively. Substantially all of the buildings
         and equipment were purchased as new properties.

(4)      Transactions  in real estate,  equipment and  accumulated  depreciation
         during 1998, 1997 and 1996 are summarized as follows:

                                                                    Accumulated
                                                     Cost          Depreciation
                                                 ------------      ------------

         Balance, December 31, 1995              $ 40,660,542      $ 12,233,701
                Cost of land sold                    (248,645)               --
                Cost of equipment sold             (3,342,522)       (2,855,684)
                Depreciation expense                       --         1,559,843
                                                 ------------      ------------

         Balance, December 31, 1996                37,069,375        10,937,860
                Depreciation expense                       --         1,316,043
                                                 ------------      ------------

         Balance, December 31, 1997                37,069,375        12,253,903
                Cost of real estate sold           (2,220,325)         (560,282)
                Depreciation expense                       --         1,191,121
                                                 ------------      ------------

         Balance, December 31, 1998              $ 34,849,050      $ 12,884,742
                                                 ============      ============

                                       29
<PAGE>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To FFCA Investor Services Corporation 86-B:


We have  audited  the  accompanying  balance  sheet  of FFCA  INVESTOR  SERVICES
CORPORATION  86-B  (a  Delaware  corporation)  as of  December  31,  1998.  This
financial  statement is the  responsibility  of the  Company's  management.  Our
responsibility is to express an opinion on this financial statement based on our
audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance about whether the balance sheet is free of material  misstatement.  An
audit includes examining,  on a test basis,  evidence supporting the amounts and
disclosures  in  the  balance  sheet.  An  audit  also  includes  assessing  the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audit provides a reasonable basis for our opinion.

In our opinion,  the balance sheet  referred to above  presents  fairly,  in all
material respects,  the financial position of FFCA Investor Services Corporation
86-B as of December 31, 1998, in conformity with generally  accepted  accounting
principles.

                                               /s/ Arthur Andersen LLP

Phoenix, Arizona,
  March 22, 1999.

                                       30
<PAGE>
                     FFCA INVESTOR SERVICES CORPORATION 86-B
                        BALANCE SHEET - DECEMBER 31, 1998

                                     ASSETS

Cash                                                                        $100
Investment in Participating Income Properties 1986, L.P., at cost            100
                                                                            ----

                    Total Assets                                            $200
                                                                            ====

                                   LIABILITY

Payable to Parent (Note 2)                                                  $100
                                                                            ----


                              STOCKHOLDER'S EQUITY

Common Stock; $l par value; 100 shares authorized,
     issued and outstanding                                                  100
                                                                            ----

                    Liability and Stockholder's Equity                      $200
                                                                            ====

       The accompanying notes are an integral part of this balance sheet.

                                       31
<PAGE>
                     FFCA INVESTOR SERVICES CORPORATION 86-B

                             NOTES TO BALANCE SHEET
                                DECEMBER 3l, l998

(l) Operations:

           FFCA  Investor  Services  Corporation  86-B (a Delaware  corporation)
(86-B) was organized on June 23, l986 to act as the assignor  limited partner in
Participating Income Properties 1986, L.P. (PIP-86).

           The  assignor  limited  partner is the owner of record of the limited
partnership units of PIP-86. All rights and powers of 86-B have been assigned to
the holders,  who are the registered and beneficial  owners of the units.  Other
than to serve as assignor  limited  partner,  86-B has no other business purpose
and will not engage in any other activity or incur any debt.

(2) Related Parties:

         Perimeter Center Management Company (a Delaware  corporation) (PCMC) is
the sole  stockholder of 86-B. The general  partner of PIP-86 is an affiliate of
PCMC.

                                       32
<PAGE>
                   PARTICIPATING INCOME PROPERTIES 1986, L.P.
                                       AND
                     FFCA INVESTOR SERVICES CORPORATION 86-B

                         -----------------------------
                                  EXHIBIT INDEX

The  following is a complete  list of exhibits  filed as part of this Form 10-K.
For  electronic  filing  purposes  only,  this report  contains  Exhibit 27, the
Financial  Data  Schedule.  Exhibit  numbers  correspond  to the  numbers in the
Exhibit Table of Item 601 of Regulation S-K.

                            Exhibit
                            -------

          Pursuant to Rule 12b-32 under the Securities  Exchange Act of 1934, as
amended,  the  following  document,  filed  with  the  Securities  and  Exchange
Commission  as Exhibit 4 to the  Co-Registrants'  Form 10-K for the fiscal  year
ended December 31, 1989,  Commission File No. 0-16720, is incorporated herein by
this reference.

                  Second  Amended and  Restated  Certificate  and
                  Agreement of Limited  Partnership which governs
                  the Partnership, as filed with the Secretary of
                  State of Delaware on April 16, 1987.

          Pursuant to Rule 12b-32 under the Securities  Exchange Act of 1934, as
amended,  the  following  documents,  filed  with the  Securities  and  Exchange
Commission  as  exhibits  to the  Co-Registrants'  Form 10-K for the fiscal year
ended December 31, 1986, Commission File No. 0-16720, are incorporated herein by
this reference.

                                                        1986 Form 10-K
                                                          Exhibit No.
                                                          -----------

                  Depositary   Agreement   of   the          3-C
                  Partnership.

                  The Certificate of  Incorporation          3-D
                  which   governs   FFCA   Investor
                  Services   Corporation  86-B,  as
                  filed with the Secretary of State
                  of Delaware on June 23, 1986.

                  Bylaws of FFCA Investor  Services          3-E
                  Corporation 86-B.

         Pursuant to Rule 12b-32 under the  Securities  Exchange Act of 1934, as
amended,  the  following  document,  filed  with  the  Securities  and  Exchange
Commission  on  October  8,  1986  as  Exhibit  10(e)  to  the   Co-Registrants'
Registration  Statement on Form S-11,  Registration No. 33-7502, is incorporated
herein by this reference.

                  Operating Agreement,  dated October 7, 1986, by
                  and  among  FFCA  Management   Company,   L.P.,
                  FFCA/PIP 1986 Property  Company,  Flying J Inc.
                  and Flying J Franchise Inc.

          Pursuant to Rule 12b-32 under the Securities  Exchange Act of 1934, as
amended,  the  following  documents,  filed  with the  Securities  and  Exchange
Commission  as exhibits to the  Co-Registrant's  Form 8-K dated March 22,  1999,
Commission File No. 0-16720, are incorporated herein by this reference.

                                                                 March 22, 1999,
                                                                    Form 8-K
                                                                   Exhibit No.
                                                                   -----------
                    Purchase  Agreement  dated as of September 4,      10.01
                    1998,  between FFCA/PIP 1986 Property Company
                    and CFJ Plaza Company III LLC

                    Purchase  Agreement  dated as of September 4,      10.02
                    1998,  between FFCA/PIP 1986 Property Company
                    and FJI Plaza Company LLC

                    Purchase  Agreement  dated as of September 4,      10.03
                    1998,  between FFCA/PIP 1986 Property Company
                    and Flying J Real  Estate  Enterprises  Inc.,
                    including the First  Amendment  thereto dated
                    as of March 22, 1999

                    Purchase  Agreement  dated as of September 4,      10.04
                    1998,  between FFCA/PIP 1986 Property Company
                    and CFJ Plaza Company II LLC

                    Purchase  Agreement  dated as of September 4,      10.05
                    1998,  between FFCA/PIP 1986 Property Company
                    and CFJ Plaza Company I LLC

                    Extension Agreement dated March 22, 1999           10.06

                    Assignment of purchase  agreement dated as of      10.07
                    March 22, 1999,  between Flying J Real Estate
                    Enterprises Inc. and FJI Plaza Company LLC