On dissolution of a firm, a partner took over ₹17,000 investments for ₹14,000. Which one of the following account will be debited/credited with how much amount?
Answer & explanation
Correct answer: option 4
The correct answer is option 4- Partner's Capital Account Debit with ₹14,000.
For an asset taken over by a partner, journal entry will be:
Partner’s Capital A/c Dr. 14,000
To Realisation A/c 14,000
Realisation amount or tookover amount is 14,000 and entry is passed for that amount in the accounts. Partners capital account is debited as his capital balance is reduced by that amount.