Anil and Shobha are partners in a firm, and on 31st March 2020, they decided to dissolve the firm. Shobha was appointed to look after the dissolution work for which she was allowed a remuneration of Rs.15,000. She agreed to bear dissolution expenses. Actual dissolution expenses paid by her amounted to Rs. 11,800. Choose the correct journal entry.

Realisation A/c Dr. 15,000
To Shobha's Capital A/c 15,000

Correct answer: Option (1) → Realisation A/c Dr. 15,000; To Shobha's Capital A/c 15,000

Concept: When a partner agrees to bear the dissolution expenses personally in return for a fixed remuneration, only the agreed remuneration is recorded (through the partner’s capital account); the actual expenses she pays are ignored in the firm’s books – per Dissolution of Partnership Firm.

Shobha’s agreed remuneration = Rs 15,000, and she agreed to bear the expenses herself. So the firm records only: Realisation A/c Dr. 15,000 To Shobha’s Capital A/c 15,000. The actual expense of Rs 11,800 is her own outflow and is not entered, so the options using Rs 11,800 or Bank A/c are wrong.