What will be the journal entry for transferring the credit balance of current account to capital account at the time of dissolution of partnership firm?

Partner Current A/c Dr.
     To Partner’s Capital A/c
(Transferring balance of current account to capital account)

The correct answer is option 2-
Partner Current A/c Dr.
     To Partner’s Capital A/c
(Transferring balance of current account to capital account)

The credit balance of current account makes the capital account of partner increase to that amount of current account. Credit balance of current has to be end so current account is debited and by transferring to balance to capital account make the increase in balance of capital so capital account is credited. So, the correct journal entry will be- Partner Current A/c Dr. To Partner’s Capital A/c.