Question

Rohit, Kunal and Sarthak are partners in a firm. They decided to dissolve their firm. Pass necessary Journal entries for the following after various assets (other than Cash and Bank) and the third party liability have been transferred to Realisation Account:
(a) Kunal agreed to pay off his wife's loan of ₹ 6,000.
(b) Total Creditors of the firm were ₹ 40,000. Creditors worth ₹ 10,000 were given a piece of furniture costing ₹ 8,000 in full and final settlement. Remaining Creditors allowed a discount of 10%.
(c) Rohit had given a loan of ₹ 70,000 to the firm which was duly paid.
(d) A machine which was not recorded in the books was taken over by Kunal at ₹ 3,000, whereas its expected value was ₹ 5,000.
(e) The firm had a debit balance of ₹ 15,000 in the Profit and Loss Account on the date of dissolution.
(f) Sarthak paid the realisation expenses of ₹ 16,000 out of his private funds, who was to get a remuneration of ₹ 15,000 for completing dissolution process and was responsible to bear all the realisation expenses.

Answer 1

 Journal

Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
(a)	Realisation A/c	Dr.		6,000
	To Kunal’s Capital A/c				6,000
	(Being Kunal agrees to pay off his wife’s loan)
(b)	Realisation A/c	Dr.		27,000
	To Cash A/c				27,000
	(Being Creditors worth Rs 30,000 paid off at a discount of 10%)
(c)	Rohit’s Loan A/c	Dr.		70,000
	To Cash A/c				70,000
	(Being Loan paid by the firm)
(d)	Kunal’s Capital A/c	Dr.		3,000
	To Realisation A/c				3,000
	(Being asset taken over by Kunal)
(e)	Rohit’s Capital A/c	Dr.		5,000
	Kunal’s Capital A/c	Dr.		5,000
	Sarthak’s Capital A/c	Dr.		5,000
	To Profit and Loss A/c				15,000
	(Being Loss distributed equally)
(f)	Realisation A/c	Dr.		15,000
	To Sarthak’s Capital A/c				15,000
	(Being remuneration of Rs 15,000 paid for completion of dissolution process)