In the case of dissolution of a partnership firm, unrecorded liabilities when paid are shown in:

Debit of Realisation Account

The correct answer is Option (1) → Debit of Realisation Account

When a partnership firm is dissolved, all assets and liabilities are transferred to the Realisation Account to determine profit or loss on realization.

• Unrecorded liabilities → These are obligations not appearing in the books, but discovered at the time of dissolution.

• When such liabilities are paid, it represents an expense or loss to the firm.

• Hence, payment of unrecorded liabilities is debited to the Realisation Account, since it reduces the firm's capital.

• The journal entry to record this payment is:

  $$\text{Realisation A/c (Debit)}$$
  $$\text{To Bank/Cash A/c (Credit)}$$