Where will the adjustment of the retiring partner be done by the partnership firm for his share of the loss if the partner retires in the middle of the year?

Retiring partner capital account (debit side)

The correct answer is option 1- Retiring partner capital account (debit side)

To account for the retiring partner's share of profits and loss during the interim period in the company's financial records, the following journal entry is recorded:

FOR PROFIT-
Debit Profit and Loss Suspense Account and Credit Retiring Partner's Capital Account.
Subsequently, the Profit and Loss Suspense Account is reconciled by transferring its balance to the Gaining Partners' Capital Accounts based on their gaining ratio.

FOR LOSS-
Debit Retiring Partner's Capital Account and credit Profit and Loss Suspense Account.

* Thus, retiring partner's capital account is debited for the share of loss for the interim period.