Page 9 - LN DISSOLUTION OF FIRM

(Expenses on Realisation) By Cash/Bank A/c
(Amount received on
To Partner’s Capital A/cs realization of assets-
(Liabilities taken over by a Partner recorded and unrecorded)
commission payable to him or any By Partners’ Capital A/c
expenses payable to him) (Assets taken over by a
partner recorded or
To Partner’ Capital A/cs unrecorded)
(For transferring profit on
Realisation) By partners’ Capital A/cs
(For transferring loss on
Realisation)

PREPARATION OF PARTNERS’ LOAN ACCOUNT:

If a partner has given any loan to firm, his loan will be paid

· After payment of all the outside liabilities : but

· Before making any payment to partners on account of capital

Partner’s Loan A/c Dr.
To Cash/Bank A/c
(Being loan of a partner paid)

Partner’s Loan A/c
Particulars (Rs.) Particulars (Rs.)

To Cash/Bank A/c By Balance b/d

If the firm has given a loan to any partner then such loan account
will show a debit balance and will appear on the asset side of

Balance Sheet of the firm. Such loan accounts are settled through

partner’s capital account by passing the following entry:

Partner’s Capital A/c Dr.
To Partner’s Loan A/c
(Being loan to partner transferred to his Capital A/c)

Preparation of partner capital Accounts
After the Transfer of
· Undistributed profits and reserves

· Profit on Realisation