Rahul a partner decided to pay off creditor of ₹50,000. Entry to be passed will be :
Answer & explanation
Correct answer: option 2
The correct answer is option 2-
Realisation A/c Dr. ₹50,000
To Rahul's Capital A/c ₹50,000
* Creditors are transferred to the realisation account. At that time entry was passed for it- Creditors Dr. To realisation A/c.
* Now Rahul agreed to settle creditors, so realisation account is debited and capital account of the partner is credited. So, the correct journal entry is -
Realisation A/c Dr. ₹50,000
To Rahul's Capital A/c ₹50,000
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