At the time of a firm's dissolution, a machine costing $\text{Rs. }20,000$ along with cash of $\text{Rs. }5,000$ were given to creditors of $\text{Rs. }30,000$ in full settlement of their claim. In this case, the Realisation Account will be debited with what amount for this settlement transaction?

Let's look at the accounting treatment for liabilities settled via assets during dissolution:When an asset (Machine) is given to a creditor in full settlement, no entry is passed for the transfer of that asset against the liability because both accounts are already closed by transferring them to the Realisation Account.However, any additional cash paid to creditors must be recorded.The journal entry for the cash payment component is:
$$\text{Realisation A/c Dr. Rs. }5,000$$
$$\text{To Bank / Cash A/c Rs. }5,000$$
Thus, the Realisation Account is explicitly debited with $\text{Rs. }5,000$.