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Question
Anita and Binita are partners in a firm. Anita had taken a loan of ₹ 15,000 from the firm. How will Anita’s loan be closed in the event of dissolution of the firm?
Options
By crediting it to Anita’s Capital Account
By debiting it to Anita’s Capital Account
By crediting it to Realisation Account
By debiting it to Cash Account
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Solution
By debiting it to Anita’s Capital Account
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Balance sheet as on 31st March 2013
| Liabilities | Amount (₹) | Assets | Amount (₹) | |
| Capital A/c | Machinery | 50000 | ||
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(2) Dissolution expenses were ₹ 3000.
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Pass the necessary journal entries for the following transactions on the dissolution of the partnership firm of Tanay and Mehak after various assets (other than cash) and external liabilities have been transferred to Realisation Account:
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- Tanay agreed to pay off his wife's loan of ₹ 12,000.
- The firm had a debit balance of ₹ 18,000 in the profit and loss account on the date of dissolution.
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- Tanay's loan of ₹ 4,000 was paid through a cheque.
- Expenses on dissolution amounted to ₹ 11,000 which were paid by Mehak.
