Question : In settlement of partner's loan of Rs 60,000 to the firm, A furniture not appearing In the books is taken over by her agreed value of Rs 70,000 . Journal entry would be
Option 1: Partner's loan A/c Dr Rs60,000
Partner 's capital a/c Dr Rs 10,000
To Bank A/c 70,000
Option 2: partner's Loan A/c Dr 70,000
To partner's capital account Rs 70,000
Option 3: Partners loan A/c Dr 70,000
to Realization account 60,000
to partner's capital account Rs 10,000
Option 4: No entry is required
Correct Answer: No entry is required
Solution :
Answer =
No entry is required.
If any liabilities were Paid through Recorded or unrecorded Assets, then Realisation a/c will Be debited and credited by the same amount.
No Journal Entry is Passed.
Hence, the correct option is 4.
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