What is the journal entry at the time of dissolution of partnership firm, if realisation expenses of ₹7,500 were to be borne by firm but paid by partner Ajay? |
Realisation A/c Dr. ₹7500 Ajay’s Capital A/c Dr. ₹7500 No entry passed Revaluation A/c Dr. ₹7500 |
Realisation A/c Dr. ₹7500 |
The correct answer is option 1-
When realisation expenses are paid by a partner on behalf of the firm: Partner's account is credited as Expenses are paid by a partner which have to be paid back by the firm to the partner. Crediting her account will increase their balance. So, the correct journal entry will be- |