Identify the journal entry to be passed in case of dissolution of a p…

The correct answer is Option (2) → Realisation A/c Dr. To Partner's Capital A/c

A liability of the firm is transferred to the credit of Realisation Account. When a partner takes the responsibility to discharge it, the payment is recorded as a payment on the firm's behalf: Realisation Account is debited and the partner's capital account is credited, because the firm now owes that amount to him.

Note: The book prints "Ralisation A/c" in this entry; it means Realisation A/c.