Question

What journal entry will be recorded for writing off the goodwill already existing in Balance Sheet at the time of retirement of a partner?

Options

• Retiring Partner’s Capital A/c     Dr.
     To Goodwill A/c

• All Partner’s Capital A/c (including retiring)        Dr. (in old ratio) 
      To Goodwill A/c

• Remaining Partner’s Capital A/c    Dr. (in gaining ratio)
        To Goodwill A/c

• Remaining Partner’s Capital A/c    Dr. (in new ratio)
        To Goodwill A/c

Answer 1

All Partner’s Capital A/c (including retiring)     Dr. (in old ratio)
    To Goodwill A/c