Vandana, Bhavna and Chandrika were partners in a firm sharing profits in the ratio of 5:3:2. Bhavna died on December 15, 2025 and Rs. 60,000 is the amount payable to her executors. 75% of amount payable is paid immediately to her executors. Pass journal entry for immediate payment being made.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Bhavna’s Executor’s A/c is debited and Cash A/c is credited with Rs. 45,000
The whole amount due to a deceased partner is first credited to her executor’s account. Any payment made to the executors is then debited to that same account and credited to Cash, because it reduces what the firm owes them.
Amount payable to the executors = Rs. 60,000
Paid immediately = 75% of Rs. 60,000 = Rs. 45,000
Entry: Bhavna’s Executor’s A/c Dr. Rs. 45,000, To Cash A/c Rs. 45,000
The balance of Rs. 15,000 is not paid now. It is transferred to Bhavna’s Executor’s Loan A/c and paid later, so the loan account has no place in the entry for the immediate payment.
The entries for settling a partner’s dues are the same on retirement and on death; for a deceased partner, the executor’s account takes the place of the capital account.
NCERT (2026-27 edition):
NCERT (2026-27 edition): |
