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Question
Mohit, Anisha and Shivam were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. On 30th September, 2023, Mohit died. After all necessary adjustments, Mohit’s capital account showed a credit balance of ₹ 4,50,000. On 1st October 2023, Mohit’s executors were paid ₹ 50,000 in cash and the balance in two equal yearly instalments starting from 30th September, 2024 with interest @ 6% p.a. on the unpaid amount. The firm closes its books on 31st March every year.
Prepare Mohit’s Executor’s account till the Amount is finally paid.
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Solution
| Dr. | Mohit’s Executor’s Account | Cr. | |||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) |
| 2023 | 2023 | ||||
| Oct 1 | To Bank A/c | 50,000 | Sept 30 | By Mohit’s Capital A/c | 4,50,000 |
| 2024 | 2024 | ||||
| Mar 31 | To Balance c/d | 4,12,000 | Mar 31 | By Interest A/c | 12,000 |
| 4,62,000 | 4,62,000 | ||||
| 2024 | 2024 | ||||
| Sept 30 | To Bank A/c | 2,24,000 | Apr 1 | By Balance b/d | 4,12,000 |
| 2025 | Sept 30 | By Interest A/c | 12,000 | ||
| Mar 31 | To Balance c/d | 2,06,000 | 2025 | ||
| Mar 31 | By Interest A/c | 6,000 | |||
| 4,30,000 | 4,30,000 | ||||
| 2025 | 2025 | ||||
| Sept 30 | To Bank A/c | 2,12,000 | Apr 1 | By Balance b/d | 2,06,000 |
| Sept 30 | By Interest A/c | 6,000 | |||
| 2,12,000 | 2,12,000 | ||||
Working Note:
Calculation of Interest and Instalments:
1. Total Loan Amount and Instalment Breakdown:
Initial Amount Due to Executor = ₹ 4,50,000
Immediate Cash Paid (Oct 1, 2023) = ₹ 50,000
Loan Balance = 4,50,000 − 50,000
= 4,00,000
Annual Principal Installment = `(4,00,000)/2`
2,00,000
