Question : Choose the correct Journal entry with respect to loan by Amit (Partner) for the following cases at the time of the firm's dissolution:
The loan by Amit (Partner) is Rs. 50,000 and the Balance in his Capital Account
(credit) is Rs. 25,000.
Option 1: debited partner's loan account and credited partner's capital account with Rs 25,000
Option 2: debited realization account and credited Banka account Rs 25,000
Option 3: Debited partner's loan account and credited bank account with Rs 25,000
Option 4: None of the above
Correct Answer: Debited partner's loan account and credited bank account with Rs 25,000
Solution :
Answer =
Debited partner's loan account and credited bank account with Rs 25000
When Partner's Loans are Paid
Partner's Loan AIC Dr. 25000.
To. Bank. Alc 25000
Hence, the correct option is 3.
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