Question

'A' owned Rs. 25,000 to 'B' 'A' becomes insolvent. 'B' got A's computer valuing Rs. 11,500 in his full settlement journal entry will be passed in the books of 'B'.

• A. Purchase A/c Dr. 11,500
  To A 11,500
• B. Computer Dr 11,500
  Bad-debts Dr. 13,500
  To A 25,000
• C. Computer A/c Dr. 25,000
  To A 25,000
• D. Computer A/c Dr. 11,500
  Purchases A/c Dr. 13,500
  To A 25,000

Answer 1

The correct option is B Computer Dr 11,500

Bad-debts Dr. 13,500
To A 25,000
As computer is received valuing Rs. 11500 therefore, it will be debit. the remaining amount will not be received therefore, it will written off as bad debts loss and there is no amount due from A therefore, his account will be credited.