At the time of dissolution of a firm, the Bank Loan was Rs. 60,000 which was paid by Bhuvan (a partner) along with one-year interest at 6\% . Which jo - Accountancy MCQ CUET Accountancy 2025 3 June Shift 2 2026 | ExamTest.live

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At the time of dissolution of a firm, the Bank Loan was Rs. 60, 000 which was paid by Bhuvan (a partner) along with one-year interest at 6% . Which journal entry will be passed in the books of the firm?

A $Realisation A/c Dr. 63,600 To Bhuvan's Capital A/c 63,600$
B $Bank Loan A/c Dr. 63,600 To Bank A/c 63,600$
C $Realisation A/c Dr. 60,000 To Bhuvan's Capital A/c 60,000$
D $Realisation A/c Dr. 60,000 Interest on Bank Loan A/c Dr. 3,600 To Bhuvan's Capital A/c 63,600$

Solution & Step-by-step Explanation

Total liability settled = Principal + Interest Interest = 60, 000 \times 6% = Rs. 3, 600 Total Amount Payable = 60, 000 + 3, 600 = Rs. 63, 600 Since the firm is dissolving, all external liabilities and interest adjustments are settled through the Realisation Account. When a partner assumes/pays this liability, we debit Realisation Account and credit the partner's Capital Account with the full combined value: Realisation A/c Dr. 63, 600 To Bhuvan’s Capital A/c 63, 600

Try it yourself before checking the explanation above.

At the time of dissolution of a firm, the Bank Loan was Rs. 60, 000 which was paid by Bhuvan (a partner) along with one-year interest at 6% . Which journal entry will be passed in the books of the firm?

Realisation A/c Dr. 63,600 To Bhuvan's Capital A/c 63,600

Bank Loan A/c Dr. 63,600 To Bank A/c 63,600

Realisation A/c Dr. 60,000 To Bhuvan's Capital A/c 60,000

Realisation A/c Dr. 60,000 Interest on Bank Loan A/c Dr. 3,600 To Bhuvan's Capital A/c 63,600

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