For payment of realisation expenses- (a) When some expenses are incurred and paid by the firm in the process of realisation of assets and payment of liabilities: Realisation A/c Dr. To Bank A/c (b) When realisation expenses are paid by a partner on behalf of the firm: Realisation A/c Dr. To Partner’s Capital A/c (c) When a partner has agreed to bear the realisation expenses: (i) if payment of realisation expenses is made by the firm Partner’s Capital A/c Dr. To Bank A/c (ii) if the partner himself pays the realisation expenses, no entry is required Note: In the absence of information about who is paying the expenses, it is implied that expenses are paid by the partner who has agreed to bear expenses.
* For agreed remuneration to such partner who agrees to undertake the dissolution work.- Realisation A/c Dr. To Partner’s Capital A/c |