Anu, Bina and Charan are partners. The firm had given a loan of ₹20,000 to Bina. They decided to dissolve the firm. In the event of dissolution, the loan will be settled by:

None of these

 Balance in loan to a partner account is retained as a separate account. It is not transferred to debit side of capital account because it will become a situation of repayment of capital before payment of outside liablilities.On receipt of amount for settlement of loan by a firm to a partner the journal entry will be-
  Bank A/c Dr.
     To loan to partners A/c