Raman and Naman were in partnership sharing profit and losses as 3: 2. Their partnership firm was dissolved on 31 March 2022. On the date of dissolution. Naman's loan was ₹20,000. Naman agreed to take stock (already transferred to Realisation A/c) of ₹15,000 at ₹18,000 and balance in cash for the settlement of the loan.
Journal Entry for the above transaction is:
Answer & explanation
Correct answer: option 1
The correct answer is option 1-
Naman's Loan A/c Dr ₹20,000
To Realisation A/c ₹18,000
To cash A/c ₹2,000
(Settlement of loan)
For an asset taken over by a partner-
Partner’s Capital A/c Dr. 18,000
To Realisation A/c 18,000
(Amount at which he has taken asset)
Balance is taken in cash-
Partner’s Capital A/c Dr. 2,000
To Cash A/c 2,000
* Here loan account is settled so loan account is debited.