Mukund's Loan of Rs. 50,000 to the firm, was settled at Rs. 55,000 at the time of firm's dissolution, where Mukund was one of the partner. What entry - Accountancy MCQ CUET Accountancy 2023 11 June Shift 3 2026 | ExamTest.live

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Mukund's Loan of Rs. 50, 000 to the firm, was settled at Rs. 55, 000 at the time of firm's dissolution, where Mukund was one of the partner. What entry will be passed?

A $Mukund Loan A/c Dr 50,000 \ Mukund Capital A/c Dr 5,000 \ To Cash A/c 55,000$
B $Mukund Loan A/c Dr 50,000 \ Realisation A/c Dr 5,000 \ To Cash A/c 55,000$
C $Mukund Loan A/c Dr 55,000 \ To Cash A/c 55,000$
D $Cash A/c Dr 55,000 \ To Mukund Loan A/c 50,000 \ To Realisation A/c 5,000$

Solution & Step-by-step Explanation

The loan value liability stands at Rs. 50, 000 . Paying an extra Rs. 5, 000 to settle it means the firm incurs a realization loss. This extra payment is debited to the Realisation Account: Mukund’s Loan A/c Realisation A/c (settlement loss) To Cash / Bank A/c Dr. Dr. 50, 000 5, 000 55, 000

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Mukund's Loan of Rs. 50, 000 to the firm, was settled at Rs. 55, 000 at the time of firm's dissolution, where Mukund was one of the partner. What entry will be passed?

Mukund Loan A/c Dr 50,000 \ Mukund Capital A/c Dr 5,000 \ To Cash A/c 55,000

Mukund Loan A/c Dr 50,000 \ Realisation A/c Dr 5,000 \ To Cash A/c 55,000

Mukund Loan A/c Dr 55,000 \ To Cash A/c 55,000

Cash A/c Dr 55,000 \ To Mukund Loan A/c 50,000 \ To Realisation A/c 5,000

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