While doing adjustment of partners capital, for the amount of capital to be brought in by the partner, the following entry will be passed: |
Bills payable A/c Dr. Partners' Capital A/c Dr. Partners' Capital A/c Dr. Cash/ Bank A/c Dr. |
Cash/ Bank A/c Dr. |
The correct answer is option 4- When partners are required to bring in additional capital (e.g., to adjust capital accounts in a new profit-sharing ratio or after revaluation), they bring cash into the firm. For that the journal Entry is as follows- Cash/Bank A/c is debited because money is coming into the business. Partners' Capital A/c is credited because the partner’s capital is increasing. |