A correct journal entry for Transfer of the balance of Profit and Loss Account (a credit balance) to Profit and Loss Appropriation Account: is-

Profit and Loss A/c Dr. To Profit and Loss Appropriation A/c

The correct answer is Option (2) → Profit and Loss A/c Dr. To Profit and Loss Appropriation A/c

When the Profit and Loss Account shows a credit balance, it means there is a net profit.
At the end of the accounting year, this profit is transferred to the Profit and Loss Appropriation Account for further appropriation among partners (e.g., for interest on capital, partner’s salary, transfer to reserve, or distribution of profit).

Thus, the correct journal entry is:

Profit and Loss A/c Dr.
    To Profit and Loss Appropriation A/c

This shows that the profit is moved from the general profit account to the appropriation account for allocation.