Question : Adiraj and Karan were partners in a firm sharing profits and losses in the ratio 3: 2. On 31st March 2018 the firm was dissolved. After the transfer of assets (other than cash in hand and at the bank) and third-party liabilities to the Realization Account, the following information was provided:
Question:
Adirja's loan amounting to Rs. 35,000 was paid. The entry will be
Option 1: Debited realization account Rs 35,000, credited bank account Rs 35,000
Option 2: Debited partner's loan account and credited bank account with Rs 35,000
Option 3: Debited partner's loan account and credited bank account with Rs 35,000
Option 4: None of the above
Correct Answer: Debited partner's loan account and credited bank account with Rs 35,000
Solution : Answer = Debited partner's loan account and credited bank account with Rs 35,000
Reason:- when Partner's Loan is Paid
Partner's Loan a/c Dr 35000
To Bank a/c 35000
Hence, the correct option is 2.
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