Anubha looked after the dissolution work for remuneration of ₹8,500 and agreed to bear dissolution expenses upto ₹6,000. Actual expenses paid by her were ₹7,600. What will be the journal entry for remuneration payable to Anubha?

(A) Realisation A/c is debited by 8,500

(B) Anubha's Capital A/c is credited by 8,500.

(C) Realisation A/c is debited by 13,600.

(D) Anubha's Capital is credited by 13,600.

Choose the correct answer from the options given below:

(A) and (B) only

The correct answer is option 1- (A) and (B) only.

The following journal entry for the remuneration is as follows-

Realisation A/c Dr.     8,500
       To Anubha's Capital A/c   8,500
(Remuneration payable to Anubha)

So, Realisation A/c is debited by 8,500 and Anubha's Capital A/c is credited by 8,500.

• The Remuneration (₹8,500): This is an expense for the firm. Therefore, the Realisation Account must be debited. Since this amount is owed to Anubha, her Capital Account must be credited.

• The Dissolution Expenses: Anubha agreed to bear the expenses. Whether she spends ₹6,000, ₹7,600, or any other amount, it is her personal responsibility. Since she paid the actual expenses (₹7,600) herself, the firm does not need to record these expenses in its books.