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 [FEE REQUIRED]
For the fiscal year ended December 31, 1997
                          -----------------
                                      OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from               to 
                               -------------    -------------            

Commission file number 0-16712
                       -------

                         BALCOR CURRENT INCOME FUND-87
                       A REAL ESTATE LIMITED PARTNERSHIP
           ------------------------------------------------------          
             Exact name of registrant as specified in its charter)

           Delaware                                      36-3451878
-------------------------------                      ------------------- 
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                       Identification No.)

2355 Waukegan Road
Bannockburn, Illinois                                      60015
----------------------------------------             -------------------
(Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code (847) 267-1600
                                                   --------------
Securities registered pursuant to Section 12(b) of the Act:  None
                                                             ----
Securities registered pursuant to Section 12(g) of the Act:

                     Limited Partnership Depositary Units
                     -------------------------------------
                               (Title of class)

Indicate by check mark whether the Registrant (1) has 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
Registrant was required to file such reports), and (2) has 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 Registrant's 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 ]
<PAGE>
                                    PART I

Item 1. Business
----------------

Balcor Current Income Fund-87 A Real Estate Limited Partnership (the
"Registrant") is a limited partnership formed in 1986 under the laws of the
State of Delaware. The Registrant raised $14,942,190 from sales of Limited
Partnership Depositary Units. The Registrant's operations currently consist of
interest income earned on short-term investments and the payment of
administrative expenses.

The Registrant utilized the net offering proceeds to acquire a joint venture
interest in Autumn Woods Apartments. During 1996, the property was sold and a
majority of the proceeds from the sale were distributed to Unitholders.

Pursuant to the Partnership Agreement, when all interests in real estate are
sold or otherwise disposed of and the General Partner is not then aware of any
remaining contingencies, the Registrant will be dissolved. The Registrant has
been dismissed as a defendant in the proposed class action lawsuit described in
"Item 3. Legal Proceedings". There are currently no outstanding contingencies.
Therefore, the General Partner commenced liquidation of the Registrant, and on
March 10, 1998, the Registrant's registration under the Securities Exchange Act
of 1934 was terminated and the Registrant was dissolved.

The Registrant no longer has an ownership interest in any real estate
investment. The General Partner is not aware of any material potential
liability relating to environmental issues or conditions affecting real estate
formerly owned by the Registrant.

The officers and employees of Balcor CIF Partners, the General Partner of the
Registrant, and its affiliates perform services for the Registrant. The
Registrant currently has no employees engaged in its operations.

Item 2. Properties
------------------

The Registrant no longer owns any physical properties.

In the opinion of the General Partner, the Registrant has obtained adequate
insurance coverage.

Item 3. Legal Proceedings
-------------------------

Klein, et al. vs. Lehman Brothers, Inc., et al.
--------------------------------------------------
On August 30, 1996, a proposed class action complaint was filed, Lenore Klein,
et al. vs. Lehman Brothers, Inc., et al. (Superior Court of New Jersey, Law
Division, Union County, Docket No. Unn-L-5162-96). The complaint was amended on
each of October 18, 1996, December 5, 1997, and January 15, 1998. The
Registrant, additional limited partnerships which were sponsored by The Balcor
Company, American Express Company, Lehman Brothers, Inc., Smith Barney, Inc.
and various other entities were originally the named defendants in the action.
<PAGE>
The December 5, 1997 and January 15, 1998 Amended Complaints, among other
changes, no longer name the Registrant as a defendant and all claims relating
to the Registrant have been eliminated from the Amended Complaint.
  
Item 4. Submission of Matters to a Vote of Security Holders
-----------------------------------------------------------

No matters were submitted to a vote of the Unitholders of the Registrant during
1997.
<PAGE>
                                    PART II

Item 5. Market for the Registrant's Common Equity and Related Stockholder
-------------------------------------------------------------------------
Matters
-------

On March 10, 1998, the Registrant was terminated in the State of Delaware. The
Registrant's registration under the Securities Exchange Act of 1934 was also
terminated on March 10, 1998.

As of December 31, 1997, the number of record holders of Units of the
Registrant was 786. For information regarding previous distributions, see
Financial Statements, Statements of Partners' Capital, and Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources, below.

Item 6. Selected Financial Data
-------------------------------

                                      Year ended December 31,                 
                   -----------------------------------------------------------
                       1997        1996        1995        1994        1993   
 
                    ----------  ----------  ----------  ---------- -----------

Total income        $   87,256 $1,709,140   $2,783,598 $2,687,874  $2,626,906
Loss before gain on
  sale of assets
  and extraordinary 
  item                (43,252)   (453,734)    (734,029)  (629,096)   (513,729)
Net (loss) income     (43,252)  7,172,044     (734,029)  (629,096)   (513,729)
Net (loss)income 
  per Unit - Basic       
  and Diluted            (.04)       7.14         (.73)      (.63)       (.51)
Total assets         1,428,080  1,453,731   10,035,233 11,185,388   12,409,021
Mortgage note
  payable                 None       None    9,525,894  9,606,251    9,679,905
Distributions per
  Unit(A)                 None       4.78         .30         .90          .90

(A) These amounts include a distribution of original capital of $4.51 per Unit
for 1996. No distributions of original capital were made in any of the three
years previous to 1996.

Item 7. Management's Discussion and Analysis of Financial Condition and Results
-------------------------------------------------------------------------------
of Operations
---------------

Summary of Operations
---------------------
<PAGE>
The operations of Balcor Current Income Fund-87 A Real Estate Limited
Partnership (the "Partnership") during 1997 were primarily comprised of the
payment of administrative expenses which were partially offset by interest
income on short-term investments. The Partnership generated a net loss in 1997
as compared to net income in 1996 due to the gain recognized from the sale of
Autumn Woods Apartments. The exterior of Autumn Woods Apartments was painted
during 1995. This was the primary reason the Partnership generated a net loss
from operations in 1995. Further discussion of the Partnership's operations is
summarized below.

1997 Compared to 1996
---------------------

As a result of the sale of Autumn Woods Apartments in August 1996, rental and
service income, interest expense on mortgage note payable, depreciation
expense, amortization expense, property operating expense, real estate tax
expense and property management fees ceased during 1996. The Partnership
recognized a gain on the sale of the property of $7,902,305 in 1996.

The Partnership recognized other income during 1997 in connection with refunds
of prior years' insurance premiums relating to the Autumn Woods Apartments.

The General Partner loan was repaid in August 1996 from a portion of the
proceeds received from the sale of Autumn Woods Apartments. As a result,
interest expense on short-term loan payable - affiliate ceased during 1996.

Incentive partnership management fees earned by the General Partner, which were
based on Net Cash Receipts, ceased during 1996 as a result of the sale of
Autumn Woods Apartments. 

Primarily as a result of decreased accounting and portfolio management fees,
administrative expenses decreased during 1997 when compared to 1996.

The Autumn Woods Apartments was owned by a joint venture consisting of the
Partnership and an affiliate. As a result of the sale of the property,
affiliate's participation in income or loss of joint venture ceased in 1996.

In connection with the sale of Autumn Woods Apartments, the Partnership wrote
off the remaining unamortized deferred expenses in the amount of $58,410.  In
addition, the Partnership incurred a prepayment penalty of $190,030 in
connection with the repayment of the underlying mortgage note payable.  For
financial statement purposes, these two amounts were recognized as an
extraordinary item and classified as debt extinguishment expense.

1996 Compared to 1995
---------------------

As a result of the sale of Autumn Woods Apartments in August 1996, the
Partnership recognized a decrease in rental and service income, interest
expense on mortgage note payable, depreciation expense, amortization expense
and property management fees during 1996 as compared to 1995.

As a result of the investment of proceeds received from the sale of Autumn
Woods Apartments, interest income on short-term investments increased during
1996 as compared to 1995.
<PAGE>
The General Partner loan was repaid in August 1996 from a portion of the
proceeds received from the sale of Autumn Woods Apartments.  As a result,
interest expense on short-term loan payable - affiliate decreased during 1996
as compared to 1995.

As a result of the sale of Autumn Woods Apartments, property operating expenses
decreased by approximately $541,000 during 1996 as compared to 1995. This
decrease was partially offset by the cost to repair the fire damage to certain
units, which will not be recovered by insurance, of approximately $26,000, and
payments made to the purchaser of the property for certain corrective work to
be done at the property of approximately $125,000.

As a result of the sale of Autumn Woods Apartments and a partial refund of
prior years' real estate taxes received in 1996, the Partnership recognized a
decrease in real estate taxes during 1996 as compared to 1995.  

The Partnership generated lower Net Cash Receipts in 1996 as a result of the
sale of Autumn Woods Apartments. As a result, the incentive partnership
management fees earned by the General Partner, which are based on Net Cash
Receipts, decreased during 1996 as compared to 1995.

Primarily as a result of decreased accounting fees, administrative expenses
decreased during 1996 when compared to 1995.

As a result of the gain recognized from the sale of Autumn Woods Apartments,
there was an affiliate's participation in income of joint venture in 1996 as
compared to affiliate's participation in loss of joint venture in 1995.

Liquidity and Capital Resources
-------------------------------

The cash position of the Partnership increased by approximately $242,000 as of
December 31, 1997 when compared to December 31, 1996, primarily due to the
collection of an account receivable related to property insurance proceeds and
interest income on short-term investments which was partially offset by the
payment of administrative expenses.  

Pursuant to the Partnership Agreement, when all interests in real estate are
sold or otherwise disposed of and the General Partner is not aware of any
remaining contingencies, the Partnership will be dissolved. The Partnership
sold the Autumn Woods Apartments in August 1996. The Partnership has been
dismissed as a defendant in the proposed class action lawsuit described in
"Item 3. Legal Proceedings". There are currently no outstanding contingencies.
Therefore the General Partner commenced liquidation of the Partnership. After
retaining approximately $58,000 to pay the final administrative expenses of the
Partnership, a final distribution of $1,436,442 ($1.442 per Unit) was made to
the Unitholders in March 1998, which represents all remaining cash reserves,
including a capital contribution of $66,007 from the General Partner pursuant
to the Partnership Agreement. (See Note 8 of Notes to the Financial Statements
for additional information regarding the General Partner's capital
contribution.)

On March 10, 1998, the Partnership was terminated in the State of Delaware.
The Partnership's registration under the Securities Exchange Act of 1934 was
also terminated on March 10, 1998.
<PAGE>
Since inception, including the final distribution issued in March 1998,
Unitholders have received distributions of Net Cash Receipts of $6.732 and Net
Cash Proceeds of $5.954 totaling $12.686 per $15.00 Unit as well as certain tax
benefits. Unitholders did not recover all of their original investment. Since
inception, the General Partner has received distributions of Net Cash Receipts
totaling $55,044 and Incentive Partnership Management fees totaling $420,158.
The General Partner did not receive any distributions of Net Cash Proceeds. 

Item 8. Financial Statements and Supplementary Data
---------------------------------------------------

See Index to Financial Statements and Financial Statement Schedule in this
Form 10-K.

The supplemental financial information specified by Item 302 of Regulation S-K
is not applicable.

The net effect of the differences between the financial statements and the tax
returns is summarized as follows:

                         December 31, 1997         December 31, 1996    
                     ------------------------   -------------------------
                      Financial        Tax       Financial        Tax
                      Statements     Returns    Statements      Returns 
                     -----------     ---------   ----------    ---------
Total assets          $1,428,080    $3,549,061   $1,453,731    $3,588,076
Partners' capital
  accounts (deficit):
    General Partner     (66,007)      (80,666)     (66,000)      (66,000)
    Unitholders        1,436,442     1,481,102    1,479,687     1,479,687
Net (loss) income :
    General Partner          (7)      (14,666)       62,151       787,293
    Unitholders         (43,245)         1,415    7,109,893     8,400,467
      Per Unit              (.04)(A)      None          7.14(A)      8.43 

(A) Amount represents basic and diluted net (loss) income per unit.

Item 9. Changes in and Disagreements with Accountants on Accounting and
-----------------------------------------------------------------------

Financial Disclosure
--------------------

There have been no changes in or disagreements with accountants on any matter
of accounting principles, practices or financial statement disclosure.
<PAGE>
                                   PART III

Item 10. Directors and Executive Officers of the Registrant
-----------------------------------------------------------

(a) Neither the Registrant nor Balcor CIF Partners, its General Partner, has a
Board of Directors.

(b, c & e) The names, ages and business experiences of the executive officers,
directors and significant employees of the General Partner of the Registrant
are as follows:

      TITLE                                        OFFICERS          

Chairman, President and Chief                 Thomas E. Meador
   Executive Officer
Senior Vice President                         Alexander J. Darragh
Senior Vice President                         John K. Powell, Jr.
Senior Managing Director, Chief               Jayne A. Kosik
   Financial Officer, Treasurer
   and Assistant Secretary                           

Thomas E. Meador (age 50) joined Balcor in July 1979.  He is Chairman,
President and Chief Executive Officer and has responsibility for all ongoing
day-to-day activities at Balcor. He is a member of the board of directors of
The Balcor Company. He is also Senior Vice President of American Express
Company and is responsible for its real estate operations worldwide. Prior to
joining Balcor, Mr. Meador was employed at the Harris Trust and Savings Bank in
the commercial real estate division where he was involved in various lending
activities. Mr. Meador received his M.B.A. degree from the Indiana University
Graduate School of Business.

Alexander J. Darragh (age 43) joined Balcor in September 1988 and is
responsible for real estate advisory services for Balcor and American Express
Company. Mr. Darragh received masters' degrees in Urban Geography from Queen's
University and in Urban Planning from Northwestern University.

John K. Powell Jr. (age 47) joined Balcor in September 1985 and is responsible
for portfolio and asset management matters relating to Balcor's partnerships.
Mr. Powell also has supervisory responsibility for Balcor's risk management  
function. He is a member of the board of directors of The Balcor Company. He
received a Master of Planning degree from the University of Virginia. Mr.
Powell has been designated a Certified Real Estate Financier by the National
Society for Real Estate Finance and is a full member of the Urban Land
Institute.

Jayne A. Kosik (age 40) joined Balcor in August 1982 and, as Chief Financial
Officer, is responsible for Balcor's financial, human resources and treasury
functions. From June 1989 until October 1996, Ms. Kosik had supervisory
responsibility for accounting functions relating to Balcor's public and private
partnerships. She is also Treasurer and a Senior Managing Director of The
Balcor Company. Ms. Kosik is a Certified Public Accountant.  
<PAGE>
(d) There is no family relationship between any of the foregoing officers or
directors.

(f) None of the foregoing officers, directors or employees are currently
involved in any material legal proceedings nor were any such proceedings
terminated during the fourth quarter of 1997.

Item 11. Executive Compensation
-------------------------------

The Registrant paid $1,589 in 1997 with respect to one of the executive
officers and directors of Balcor CIF Partners, the General Partner. The
Registrant has not paid and does not propose to pay any remuneration to the
remaining executive officers and directors of the General Partner. Certain of
the remaining officers receive compensation from The Balcor Company but not
from the Registrant for services performed for various affiliated entities,
which may include services performed for the Registrant. However, the General
Partner believes that any such compensation attributable to services performed
for the Registrant is immaterial to the Registrant. See Note 8 of Notes to
Financial Statements for the information relating to transactions with
affiliates.

Item 12. Security Ownership of Certain Beneficial Owners and Management
-----------------------------------------------------------------------

(a) No person owns of record or is known by the Registrant to own beneficially
more than 5% of the Units issued by the Registrant, other than that listed in
Item 12(b) below.

(b) Balcor Employee Investment Partners-1987, a Partnership which is an
affiliate of the General Partner, and the General Partner's officers and
partners own as a group the following number of Units, which are controlled by
the General Partner.

                                  Amount
                               Beneficially
         Title of Class            Owned       Percent of Class
         --------------        -------------   ----------------

         Units                 117,066 Units          12%

Relatives of the officers and affiliates of the partners of the General Partner
do not own any additional units.

(c) The Registrant is not aware of any arrangements, the operation of 
which may result in a change of control of the Registrant.

Item 13. Certain Relationships and Related Transactions
-------------------------------------------------------

(a & b) See Note 3 of Notes to Financial Statements for information relating to
the Partnership Agreement and the allocation of distributions and profits and
losses.
<PAGE>
See Note 8 of Notes to Financial Statements for additional information relating
to transactions with affiliates.

(c) No management person is indebted to the Registrant.

(d) The Registrant has no outstanding agreements with any promoters.
<PAGE>
                                    PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
------------------------------------------------------------------------

(a)
(1 & 2) See Index to Financial Statements and Financial Statement Schedule in
this Form 10-K.

(3) Exhibits:

(3) The Amended and Restated Agreement and Certificate of Limited Partnership,
previously filed as Exhibit 3 to Amendment No. 2 to the Registrant's
Registration Statement on Form S-11 dated December 17, 1986 (Registration
No. 33-7858), is hereby incorporated herein by reference.

(4) Form of Subscription Agreement set forth as Exhibit 4.1 to Amendment No. 2
to the Registrant's Registration Statement on Form S-11 dated December 17, 1986
(Registration No. 33-7858) and Form of Confirmation regarding Depositary Units
in the Registrant set forth as Exhibit 4.2 to the Registrant's Report on Form
10-Q for the quarter ended June 30, 1992 (Commission File No. 0-16712) are
incorporated herein by reference.

(10) Agreement of Sale and letter dated July 12, 1996 relating to the sale of
Autumn Woods Apartments previously filed as Exhibits (2)(a) and (b) to the
Registrant's Current Report on Form 8-K dated July 5, 1996, is incorporated
herein by reference.

(27) Financial Data Schedule of the Registrant for 1997 is attached hereto.

(b) Reports on Form 8-K:  A Current Report on Form 8-K dated January 15, 1998
was filed reporting the status of proposed class action litigation to which the
Registrant was a party.

(c) Exhibits: See Item 14(a)(3) above.
<PAGE>
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of l934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                         BALCOR CURRENT INCOME FUND-87
                         A REAL ESTATE LIMITED PARTNERSHIP

                         By:/s/Jayne A. Kosik
                             ----------------------------
                               Jayne A. Kosik
                               Senior Managing Director, and Chief
                               Financial Officer (Principal 
                               Accounting Officer)
                               of Balcor CIF Partners,
                               the General Partner

Date: March 17, 1998 
      ----------------

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

       Signature                     Title                       Date    
---------------------   -------------------------------      ------------

                         President and Chief Executive
                         Officer (Principal Executive
                         Officer) of Balcor CIF Partners,
                         the General Partner
/s/Thomas E. Meador                                          March 17, 1998
--------------------                                         --------------
   Thomas E. Meador

                         Senior Managing Director, and Chief
                         Financial Officer (Principal
                         Accounting Officer)
                         of Balcor CIF Partners,                               
                         the General Partner
/s/Jayne A. Kosik                                            March 17, 1998
-------------------                                          --------------
   Jayne A. Kosik
<PAGE>
                         INDEX TO FINANCIAL STATEMENTS

Report of Independent Accountants

Financial Statements:

Balance Sheets, December 31, 1997 and 1996

Statements of Partners' Capital (Deficit), for the years ended December 31,
1997, 1996 and 1995

Statements of Income and Expenses, for the years ended December 31, 1997, 1996
and 1995

Statements of Cash Flows, for the years ended December 31, 1997, 1996 and 1995

Notes to Financial Statements

Financial Statement Schedules are omitted for the reason that they are
inapplicable or equivalent information has been included elsewhere herein.
<PAGE>
                       REPORT OF INDEPENDENT ACCOUNTANTS


To the Partners of
Balcor Current Income Fund-87, A Real Estate Limited Partnership:

We have audited the financial statements of Balcor Current Income Fund-87 A
Real Estate Limited Partnership (A Delaware Limited Partnership) as listed in
the Index of this Form 10-K. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements 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 Balcor Current Income Fund-87
A Real Estate Limited Partnership at December 31, 1997 and 1996, and the
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1997, in conformity with generally accepted
accounting principles.

As described in Note 1 to the financial statements, the partnership agreement
provides for the dissolution of the Partnership upon the disposition of all its
interests in real estate. At December 31, 1996, the Partnership had disposed of
all its interests in real estate and, accordingly, has ceased operations and
was dissolved on March 10, 1998.


                              COOPERS & LYBRAND L.L.P.


Chicago, Illinois
March 11, 1998
<PAGE>
                         BALCOR CURRENT INCOME FUND-87
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (A Delaware Limited Partnership)

                                BALANCE SHEETS
                          December 31, 1997 and 1996

                                    ASSETS

                                                  1997            1996
                                             -------------   -------------
Cash and cash equivalents                    $  1,408,258    $  1,166,719
Accounts and accrued interest receivable           19,822         287,012
                                             -------------   -------------
                                             $  1,428,080    $  1,453,731
                                             =============   =============

                       LIABILITIES AND PARTNERS' CAPITAL

Accounts payable                             $     37,508    $      2,474
Due to affiliates                                  20,137          37,570
                                             -------------   -------------
    Total liabilities                              57,645          40,044
                                             -------------   -------------

Commitments and contingencies

Unitholders' capital 
  (996,146 Units issued and outstanding)        1,436,442       1,479,687

General Partner's deficit                         (66,007)        (66,000)
                                             -------------   -------------
    Total partners' capital                     1,370,435       1,413,687
                                             -------------   -------------
                                             $  1,428,080    $  1,453,731
                                             =============   =============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                         BALCOR CURRENT INCOME FUND-87
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (A Delaware Limited Partnership)

                  STATEMENTS OF PARTNERS' CAPITAL (DEFICIT) 
             for the years ended December 31, 1997, 1996, and 1995

                               Partners' (Deficit) Capital  Accounts
                               -------------- -------------- -------------
                                                  General         Unit-
                                     Total        Partner        holders
                               -------------- -------------- -------------
                                               
Balance at December 31, 1994    $     50,915  $    (101,009) $    151,924

Cash distributions to:
  Unitholders (A)                   (298,844)                    (298,844)
  General Partner                     (2,492)        (2,492)
Net loss for the year
  ended December 31, 1995           (734,029)        (7,340)     (726,689)
                               -------------- -------------- -------------
Balance at December 31, 1995        (984,450)      (110,841)     (873,609)

Cash distributions to:
  Unitholders (A)                 (4,756,597)                  (4,756,597)
  General Partner                    (17,310)       (17,310)
Net income for the year            
  ended December 31, 1996          7,172,044         62,151     7,109,893
                               -------------- -------------- -------------
Balance at December 31, 1996       1,413,687        (66,000)    1,479,687

Net loss for the year
  ended December 31, 1997            (43,252)            (7)      (43,245)
                               -------------- -------------- -------------
Balance at December 31, 1997    $  1,370,435  $     (66,007) $  1,436,442
                               ============== ============== =============

(A) Summary of cash distributions paid per Unit:

                                        1997           1996          1995
                               -------------- -------------- -------------

            First Quarter               None  $       0.075  $       .075
            Second Quarter              None          0.075          .075
            Third Quarter               None          0.075          .075
            Fourth Quarter              None          4.550          .075


The accompanying notes are an integral part of the financial statements.
<PAGE>
                         BALCOR CURRENT INCOME FUND-87
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (A Delaware Limited Partnership)

                       STATEMENTS OF INCOME AND EXPENSES
             for the years ended December 31, 1997, 1996, and 1995


                                     1997          1996           1995
                               -------------- -------------- -------------
Income:
  Rental and service                          $   1,628,571  $  2,759,205
  Interest on short-term
    investments                 $     84,196         80,569        24,393
  Other income                         3,060
                               -------------- -------------- -------------
    Total income                      87,256      1,709,140     2,783,598
                               -------------- -------------- -------------
Expenses:
  Interest on mortgage
    note payable                                    484,575       836,418
  Interest on short-term
    loan payable - affiliate                         36,262        68,668
  Depreciation                                      459,517       783,755
  Amortization                                       18,585        31,860
  Property operating                                803,383     1,193,794
  Real estate taxes                                 116,448       264,863
  Property management fees                           81,700       137,458
  Incentive partnership 
    management fees                                  14,007        22,412
  Administrative                     130,508        148,397       179,673
                               -------------- -------------- -------------
    Total expenses                   130,508      2,162,874     3,518,901
                               -------------- -------------- -------------
Loss before gain on sale of 
  property, affiliate's 
  participation in joint venture
  and extraordinary item             (43,252)      (453,734)     (735,303)

Gain on sale of property                          7,902,305

Affiliate's participation in 
  (income) loss of joint venture                    (28,087)        1,274
                               -------------- -------------- -------------
(Loss) income  before 
  extraordinary item                 (43,252)     7,420,484      (734,029)

Extraordinary item:
  Debt extinguishment expense                      (248,440)
                               -------------- -------------- -------------
Net (loss) income               $    (43,252) $   7,172,044  $   (734,029)
                               ============== ============== =============
                                                                         
The accompanying notes are an integral part of the financial statements.
<PAGE>
                         BALCOR CURRENT INCOME FUND-87
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (A Delaware Limited Partnership)

                       STATEMENTS OF INCOME AND EXPENSES
             for the years ended December 31, 1997, 1996, and 1995
                                  (Continued)

                                     1997           1996          1995
                               -------------- -------------- -------------
(Loss) income  before 
  extraordinary item allocated     
  to General Partner            $         (7) $      64,635  $     (7,340)
                               ============== ============== =============
(Loss)income  before 
  extraordinary item allocated
  to Unitholders                $    (43,245) $   7,355,849  $   (726,689)
                               ============== ============== =============
(Loss)income  before 
  extraordinary item per Unit 
  (996,146 issued and outstanding)
  -Basic and Diluted            $      (0.04) $        7.38  $      (0.73)
                               ============== ============== =============
Extraordinary item allocated to 
  General Partner                       None  $      (2,484)         None
                               ============== ============== =============
Extraordinary item allocated to 
  Unitholders                           None  $    (245,956)         None
                               ============== ============== =============
Extraordinary item per Unit
  (996,146 issued and outstanding)
  -Basic and Diluted                    None  $       (0.25)         None
                               ============== ============== =============
Net (loss) income allocated to     
  General Partner               $         (7) $      62,151  $     (7,340)
                               ============== ============== =============
Net (loss) income  allocated to    
  Unitholders                   $    (43,245) $   7,109,893  $   (726,689)
                               ============== ============== =============
Net (loss) income  per Unit 
  (996,146 issued and outstanding)
  -Basic and Diluted            $      (0.04) $        7.14  $      (0.73)
                               ============== ============== =============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                         BALCOR CURRENT INCOME FUND-87
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (A Delaware Limited Partnership)

                             STATEMENTS OF CASH FLOWS
             for the years ended December 31, 1997, 1996, and 1995

                                    1997          1996           1995
                               -------------- -------------- -------------
Operating activities:
  Net (loss) income             $    (43,252) $   7,172,044  $   (734,029)
  Adjustments to reconcile net
    (loss) income to net cash 
    provided by or (used in) 
    operating activities:
      Extraordinary item:
        Debt extinguishment                                
          expense                                    58,410
      Gain on sale of property                   (7,902,305)
      Affiliate's participation
        in income (loss) from
        joint venture                                28,087        (1,274)
      Depreciation of property                      459,517       783,755
      Amortization of deferred
        expenses                                     18,585        31,860
      Accrued interest expense
        due at maturity - 
        affiliate                                    36,262        68,668
      Net change in:
        Accounts receivable          267,190       (287,012)
        Escrow deposits                             153,190       (47,307)
        Prepaid expenses                             28,541       (28,541)
        Accounts payable              35,034        (48,414)       33,001
        Due to affiliates            (17,433)       (58,867)      (21,836)
        Accrued liabilities                        (274,351)       (9,488)
        Security deposits                           (39,478)       (2,282)
                               -------------- -------------- -------------
  Net cash provided by or
    (used in) operating activities   241,539       (655,791)       72,527
                               -------------- -------------- -------------

Investing activity:
  Proceeds from sale of
    property                                     17,400,000
  Payment of selling costs                         (409,810)
                                              --------------
  Net cash provided by investing
    activity                                     16,990,190
                                              --------------

The accompanying notes are an integral part of the financial statements.
<PAGE>
                         BALCOR CURRENT INCOME FUND-87
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (A Delaware Limited Partnership)

                           STATEMENTS OF CASH FLOWS
             for the years ended December 31, 1997, 1996, and 1995
                                       (Continued)

                                     1997          1996           1995
                               -------------- -------------- -------------
Financing activities:
  Distributions to 
    Unitholders                               $  (4,756,597) $   (298,844)
  Distributions to General
    Partner                                         (17,310)       (2,492)
  Distributions to joint 
    venture partner - 
    affiliate                                       (50,460)       (1,222)
  Repayment of loan payable
    - affiliate                                  (1,046,524)     (100,000)
  Repayment of mortgage note                               
    payable                                      (9,483,014)
  Principal payments on 
    mortgage note payable                           (42,880)      (80,357)
                                              -------------- -------------
  Net cash used in financing
    activities                                  (15,396,785)     (482,915)
                                              -------------- -------------
Net change in cash and cash
  equivalents                   $    241,539        937,614      (410,388)
Cash and cash equivalents at
  beginning of year                1,166,719        229,105       639,493
                               -------------- -------------- -------------
Cash and cash equivalents at
  end of year                   $  1,408,258  $   1,166,719  $    229,105
                               ============== ============== =============

The accompanying notes are an integral part of the financial statements
<PAGE>
                         BALCOR CURRENT INCOME FUND-87
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (A Delaware Limited Partnership)

                         NOTES TO FINANCIAL STATEMENTS

1. Termination of Partnership Affairs:

Pursuant to the Partnership Agreement, when all interests in real estate are
sold or otherwise disposed of and the General Partner is not aware of any
remaining contingencies, Balcor Current Income Fund-87 A Real Estate Limited
Partnership,(the "Partnership") will be dissolved. The Partnership sold the
Autumn Woods Apartments in August 1996. The Partnership has been dismissed as a
defendant in a proposed class action lawsuit. There are currently no
outstanding contingencies. Therefore, the General Partner commenced liquidation
of the Partnership. After retaining approximately $58,000 to pay the final
administrative expenses of the Partnership, a final distribution of $1,436,442
($1.442 per Unit), was made to the Unitholders in March 1998, which represents
all remaining cash reserves, including a capital contribution of $66,007 from
the General Partner pursuant to the Partnership Agreement. Including this final
distribution, Unitholders have received cumulative distributions of Net Cash
Receipts of $6.730 and Net Cash Proceeds of $5.952 totaling $12.682 per $15.00
Unit.  

On March 10, 1998, the Partnership was terminated in the State of Delaware.
The Partnership's registration under the Securities Exchange Act of 1934 was
also terminated on March 10, 1998.  

2.  Accounting Policies:

(a) The preparation of the financial statements in conformity with generally
accepted accounting principles required the General Partner to make estimates
and assumptions that affected the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could vary from those estimates.

(b) Depreciation expense was computed using the straight-line method. Rates
used in the determination of depreciation were based upon the following
estimated useful lives:

               Buildings and improvements          20 years
               Furniture and fixtures              5 years

Maintenance and repairs were charged to expense when incurred. Expenditures for
improvements were charged to the related asset account.

When the property was sold, the related costs and accumulated depreciation were
removed from the respective accounts. Any gain or loss on disposition was
recognized in accordance with generally accepted accounting principles.

c) Effective January 1, 1995 the Partnership adopted Statement of Financial
Accounting Standards, No. 121 (SFAS 121), "Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to be Disposed Of". Under SFAS 121, the
<PAGE>
Partnership recorded its investment in real estate at the lower of cost or fair
value, and periodically assessed, but not less than on an annual basis,
possible impairment to the value of its property. The General Partner estimated
the fair value of its property based on the current sales price less estimated
closing costs. Under SFAS 121, the General Partner determined that no
impairment in value had occurred prior to the sale of the property. The General
Partner considered the method referred to above to result in a reasonable
measurement of the property's fair value, unless other factors affecting the
property's value indicated otherwise.

(d) Deferred expenses consisted of financing fees which were amortized over the
term of the loan, through the date of the property's sale. Upon sale, any
remaining balance was recognized as debt extinguishment expense and classified
as an extraordinary item.

(e) The Financial Accounting Standard Board's Statement No. 107, "Disclosures
About Fair Value of Financial Instruments", requires disclosure of fair value
information about financial instruments for which it is practicable to estimate
that value. Statement No. 107 does not apply to all balance sheet items and
excludes certain financial instruments and all non-financial instruments such
as real estate from its disclosure requirements.

(f) For financial statement purposes, prior to 1996 partners were allocated
income and loss in accordance with the provisions in the Partnership Agreement.
In order for the capital accounts of the General Partner and Unitholders to
appropriately reflect their remaining economic interests as provided for in the
Partnership Agreement, income (loss) allocations between the General Partner
and Unitholders have been adjusted for financial statement purposes in 1997 and
1996.

(g) Cash and cash equivalents included all unrestricted, highly liquid
investments with an original maturity of three months or less. Cash was held or
invested primarily in one financial institution.

(h) The Partnership was not liable for Federal income taxes and each partner
recognized his proportionate share of the Partnership income or loss in his tax
return; therefore, no provision for income taxes was made in the financial
statements of the Partnership.

(i) Revenue was recognized on an accrual basis in accordance with generally
accepted accounting principles.

(j) Statement of Financial Accounting Standards, NO. 128, "Earnings per Share"
was adopted by the Partnership for the year-ended December 31,1997 and has been
applied to all prior earnings periods presented in the financial statements.
Since the Partnership has no dilutive securities, there is no difference
between Basic and Diluted Net Income (Loss) per Unit.

3. Partnership Agreement:

The Partnership was organized in July 1986. The Partnership Agreement provided
for Balcor CIF Partners to be the General Partner and for the sale of up to
5,000,000 Limited Partnership Depositary Units at $15 per Unit, 996,146 of
which were sold through December 1987, when the offering terminated.
<PAGE>
The Partnership Agreement provided that, except for profit or loss from the
sale or other disposition of Partnership property, each item of profit or loss
was allocated 1% to the General Partner and 99% to Unitholders. For financial
statement purposes, prior to 1996 partners were allocated income and loss in
accordance with the provisions in the Partnership Agreement. In order for the
capital accounts of the General Partner and Unitholders to appropriately
reflect their remaining economic interests as provided for in the Partnership
Agreement, income (loss) allocations between the General Partner and
Unitholders have been adjusted for financial statement purposes in 1997 and
1996.

Net Cash Receipts available for distribution were to be distributed to
Unitholders on a quarterly basis as follows: 94% to Unitholders and 6% to the
General Partner for the 12-month period commencing on the first day of the
first full calendar quarter following the termination of the offering, 93% to
Unitholders and 7% to the General Partner for the next 12-month period, 92% to
Unitholders and 8% to the General Partner for the next 12-month period, 91% to
Unitholders and 9% to the General Partner for the next 12-month period and 90%
to Unitholders and 10% to the General Partner for each 12-month period
thereafter. For such periods, 1% of such Net Cash Receipts was the General
Partner's distributive share from operations and 5%, 6%, 7%, 8% and 9%,
respectively, was its Incentive Partnership Management Fee. To the extent of
any deficiency in the Unitholders' receipt of Preferred Distributions for any
year, up to 25% of the General Partner's share of Net Cash Receipts (including
Incentive Partnership Management Fees) for that year was subordinated to the
Unitholders' receipt of such Preferred Distributions. Preferred Distributions
were those amounts equal to 8% per annum for the three-year period commencing
on the first day of the full calendar quarter following the termination of the
offering, 8.5% per annum for the next three-year period, 9% per annum for the
next two-year period and 10% per annum for each 12-month period thereafter on
Adjusted Original Capital, to be satisfied from Net Cash Receipts and Net Cash
Proceeds. 

Since the Preferred Distribution levels to the Unitholders were not attained in
any year, the General Partner subordinated 25% of its share of Net Cash
Receipts. The General Partner received $19,611 and $22,412 of Incentive
Partnership Management Fees and $2,180 and $2,492 as its unsubordinated
distributive share of Net Cash Receipts during 1996 and 1995, respectively. The
General Partner did not receive any such amounts during 1997. The remaining 75%
of Net Cash Receipts distributions which the General Partner was entitled to
receive in 1988 and 1989 was voluntarily subordinated to the prior receipt of
certain returns to the Unitholders. 

The Partnership Agreement provided that the Net Cash Proceeds resulting from
the sale of the property which were available for distribution were to be
distributed first to the General Partner to the extent of its share of Net Cash
Receipts voluntarily subordinated in 1988 and 1989, which totaled $98,083; then
to Unitholders until such time as Unitholders received an amount equal to their
Original Capital plus any deficiency in a 6% per annum Cumulative Distribution
on Adjusted Original Capital. Thereafter, remaining Net Cash Proceeds were to
be paid to the General Partner to pay any subordinated real estate commissions
on property sales; next, to pay to Unitholders an amount equal to any
deficiency in their receipt of Preferred Distributions; next, to the General
Partner in an amount equal to any deficiencies in its required subordinated
<PAGE>
share of Net Cash Receipts and Incentive Partnership Management Fees; and
finally 85% to Unitholders and 15% to the General Partner. In 1996, the
Partnership paid the subordinated Net Cash Receipts distributions from 1988 and
1989 totaling $98,083 to the General Partner.  Based on the amount of Net Cash
Proceeds received by the Partnership from the sale of Autumn Woods Apartments,
the General Partner did not receive any further distributions of Net Cash 
Proceeds.

4. Mortgage Note Payable:

In 1993, the Partnership obtained a $9,720,000 first mortgage loan
collateralized by Autumn Woods Apartments. The loan was repaid when the
property was sold in 1996. During 1996 and 1995, the Partnership incurred and
paid interest expense on the mortgage note payable of $484,575 and $836,418,
respectively.

5. Management Agreement:

Autumn Woods Apartments was under a management agreement with a third-party
management company prior to its sale in 1996. This management agreement
provided for annual fees of 5% of gross operating receipts.

6. Affiliate's Participation in Joint Venture:

The Autumn Woods Apartments was owned by the Partnership and an affiliated
partnership. Profits and losses were allocated 99.7291% to the Partnership and
 .2709% to the affiliate. All assets, liabilities, income and expenses of the
joint venture are included in the financial statements of the Partnership with
the appropriate adjustment for profit or loss for the affiliate's
participation. Autumn Woods Apartments was sold in 1996, and the joint venture
partner received its share of the net sales proceeds plus its share of the
remaining assets held by the joint venture. The joint venture was terminated in
1996. See Note 9 of Notes to Financial Statements for additional information.
Distributions of $50,460 and $1,222 were made to the joint venture partner
during 1996 and 1995, respectively. 

7. Tax Accounting:

The Partnership keeps its books in accordance with the Internal Revenue Code,
rules and regulations promulgated thereunder, and existing interpretations
thereof. The accompanying financial statements, which are prepared in
accordance with generally accepted accounting principles, will differ from the
tax returns due to the different treatment of various items as specified in the
Internal Revenue Code. The net loss in the financial statements is $30,001
greater than the tax loss for 1997.

8. Transactions with Affiliates:

Fees and expenses paid and payable by the Partnership to affiliates are:
<PAGE>
                            Year Ended       Year Ended       Year Ended
                             12/31/97         12/31/96         12/31/95   
                          --------------   --------------   --------------
                           Paid  Payable    Paid  Payable    Paid  Payable
                          ------ -------   ------ -------   ------ -------

Incentive partnership
  management fees             None  None$102,564     None $22,412   $88,557
Reimbursement of expenses
  to the General Partner,
  at cost:
    Accounting            $12,336 $6,389   7,275   $7,676  30,923     2,160
    Data processing         4,047  1,177   1,631      869   7,401       614
    Investor communica-
      tions                  None   None    None     None   4,602      None
    Legal                   4,319  2,916   1,651    1,742   6,153       415
    Portfolio management   22,268  9,655  21,268   22,441  39,506     4,673
    Other                   4,842   None   4,589    4,842   4,807        18

Since the Limited Partners did not receive Net Cash Proceeds distributions in
an amount equal to their original capital contribution, the General Partner is
required to make a capital contribution of $66,007 to the Partnership upon
dissolution in accordance with the Partnership Agreement. This amount was
included in the Net Cash Proceeds distribution made to the Unit Holders in
March 1998. 

The Partnership participated in an insurance deductible program with other
affiliated partnerships in which the program paid claims up to the amount of
the deductible under the master insurance policies for its properties. The
program was administered by an affiliate of the General Partner (The Balcor
Company) which received no fee for administering the program; however, the
General Partner was reimbursed for program expenses. The Partnership paid
premiums to the deductible insurance program of $3,940 and $18,387 in 1996 and
1995, respectively.

In conjunction with the 1993 financing of Autumn Woods Apartments, the monthly
debt service payments due on the first mortgage loan were required to be funded
by advances from the General Partner through December 16, 1994, at which time
the General Partner loan became due, and was extended. During 1995, the
Partnership repaid $100,000.  The remainder of the General Partner loan and
accrued interest was repaid in full in August 1996 from proceeds received in
connection with the sale of Autumn Woods Apartments.  During 1996 and 1995, the
Partnership incurred interest expense of $36,262 and $68,668, respectively,
which was added to the loan balance.

9. Property Sale:

The Autumn Woods Apartments was owned by a joint venture consisting of the
Partnership and an affiliate. The Partnership and the affiliate held
participating percentages in the joint venture of 99.7291% and 0.2709%,
respectively. In August 1996, the joint venture sold the property in an all
cash sale for $17,400,000. From the proceeds of the sale, the joint venture
paid $9,483,014 to the third party mortgage holder in full satisfaction of the
<PAGE>
first mortgage loan, and paid $409,810 in selling costs and $190,030 of
prepayment penalties. The basis of the property was $9,087,885, which is net of
accumulated depreciation of $8,430,505. For financial statement purposes, the
Partnership recognized a gain of $7,902,305 from the sale of this property, of
which $30,065 was the minority joint venture partner's share.

10. Extraordinary Items:

In connection with the sale of Autumn Woods Apartments, the Partnership paid
prepayment penalties of $190,030 in 1996. In addition, the Partnership wrote
off the remaining unamortized deferred financing fees of $58,410.  Both of
these amounts were recorded as debt extinguishment expense and classified as an
extraordinary item in the financial statements.
 
11. Fair Values of Financial Instruments:

The carrying amounts and fair values of the Partnership's financial instruments
at December 31, 1997 and 1996 are as follows:

The carrying values of cash and cash equivalents, accounts and accrued interest
receivable and accounts payable approximate fair value.
<PAGE>