In case of retirement, the profit and loss suspense account is closed…

The correct answer is option 4- Gaining partners Capital Account.

To account for the deceased partner's share of profits during the interim period in the company's financial records, the following journal entry is recorded:

Profit & Loss Suspense A/c        Dr

       To Retiring Partners Capital A/c

(Share of profit for intervening/period)

Later Profit and Loss Suspense account is closed by transferring the account to Gaining Partners' Capital Account in their gaining ratio. The journal entry is:

Gaining Partners Capital A/c [In gaining ratio]
       To Profit and Loss Suspense A/c
(P&L Suspense account transferred).