At the time of the Dissolution of the firm, partner X has a Debit balance of ₹50,000 on his Account. He also had given a sum of ₹60,000 as a loan to the firm. Which one of the following options is correct in this regard?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- X will be paid off by ₹10,000.
Credit balance of loan = 60,000
Debit balance of capital account = 50,000
Debit balance is adjusted against loan. 50,000 is adjusted. So, remaining amount is 10,000.
The firm will pay him the difference amount ₹10,000. The journal entry for this-
X's Capital A/c Dr. 10,000
To Bank A/c 10,000