Question

Pass Journal entries in the following cases?
(a) Expenses of realisation ₹ 1,500.
(b) Expenses of realisation ₹ 600 but paid by Mohan, a partner.
(c) Mohan, one of the partners of the firm, was asked to look into the dissolution of the firm for which he was allowed a commission of ₹ 2,000.
(d) Motor car of book value ₹ 50,000 taken over by creditors of the book value of ₹ 40,000 in full settlement.

Answer 1

Journal

S.N.	Particulars		L.F.	Debits Amount Rs	Credit Amount Rs
(a)	Realisation A/c	Dr.		1,500
	To Cash A/c				1,500
	(Realisation expenses paid)
(b)	Realisation A/c	Dr.		600
	To Mohan’s Capital A/c				600
	(Realisation expenses paid by Mohan)
(c)	Realisation A/c	Dr.		2,000
	To Mohan’s capital A/c				2,000
	(Commission allowed to Mohan on dissolution of the firm)
(d)	No entry No journal entry is passed because both motor car and creditors accounts have already been transferred to Realisation Account and nothing is recovered or paid in terms of Cash and Bank