On a Dissolution of a firm, repayment of Partner's loan to the firm w…

The correct answer is Option (4) → Credit of Bank A/c

A partner’s loan is not transferred to the Realisation Account. After outside liabilities are paid, it is repaid in cash: Partner’s Loan A/c Dr., To Bank A/c. The repayment therefore appears on the credit side of the Bank Account.

Option (1) Credit of Realisation Account — Incorrect. Outside liabilities go to the Realisation Account; a partner’s loan is settled separately.

Option (2) Partner's Capital Account — Incorrect. The loan is repaid before capital and is kept apart from it.

Option (3) Partner's Current Account — Incorrect. The current account records drawings, interest and shares of profit, not loans.