In case of dissolution of firm, if a partner agrees to take over the debtors of Rs. 80,000 at 10% discount, the entry for the same shall be:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Debit Partner’s Capital A/c and Credit Realisation A/c with Rs. 72,000
When a partner takes over an asset, he pays for it out of his share of the firm, so his capital account is debited and Realisation Account is credited, the same way a sale to an outsider credits Realisation Account. The amount is the value at which he takes it over, not its book value.
Debtors taken over = Rs. 80,000 − 10% of Rs. 80,000
Debtors taken over = Rs. 80,000 − Rs. 8,000 = Rs. 72,000
The book value of Rs. 80,000 is already on the debit side of Realisation Account from the transfer of assets; the Rs. 8,000 difference becomes part of the loss on realisation.
NCERT (2026-27 edition):
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