In case of admission of a partner, expenses on the revaluation account are paid by a partner named A of ₹3,500, what will be the journal entry for this?
Answer & explanation
Correct answer: option 3
The correct answer is option 3-
Revaluation A/c Dr.. ₹3,500
To A's capital A/c ₹3,500
(Expenses of revaluation paid by partner)
Expenses are paid by partner; these are to be returned by the firm if it is mentioned in partnership deed. Expenses are losses for the firm that's why revaluation account is debited, and partners' capital A/c is credited.