Question

P and Q were partners in a firm. Pass journal entries for the following transactions on dissolution of the firm after various assets and external liabilities have been transferred to Realisation A/c :

(i) X, an unrecorded creditor of Rs. 10,000 was paid by partner P at a discount of 20%.

(ii) Y, an unrecorded creditor of Rs. 25,000, took over Computer at Rs. 30,000. Balance was paid by him in cash.

(iii) Computer of Rs. 25,000 and a Vehicle of Rs. 10,000 were appearing in the Balance Sheet but no other additional information was given regarding these items.

(iv) A creditor to whom Rs. 10,000 were to be paid accepted an unrecorded asset of Rs. 15,000 in full settlement of his claim.

(v) An unrecorded asset of Rs. 35,000 was given to an unrecorded creditor of Rs. 50,000 in settlement of his claim of Rs. 30,000 and the balance was paid to him in cash.

(vi) P's loan was appearing on the liabilities side of the Balance Sheet at Rs. 50,000. He accepted an unrecorded asset of Rs. 40,000 at Rs. 35,000 and the balance was paid to him in Cash.

Answer 1

JOURNAL
$\begin{array}{cccccc}\text{Date}& \text{Particulars}& & \text{L.F.}& \text{Dr (Rs.)}& \text{Cr. (Rs.)}\\ \text{(i)}& \text{Realisation A/c}& \text{Dr.}& & 8,000& \\ & \text{To P's Capital A/c}& & & & 8,000\\ & \text{(Unrecorded liability of Rs 10,000 taken over by P at a}& & & & \\ & \text{discount of}20\%)& & & & \\ \text{(ii)}& \text{Bank A/c}& \text{Dr.}& & 5,000& \\ & \text{To Realisation A/c}& & & & 5,000\\ & \text{(Cash received from unrecorded creditor)}& & & & \\ \text{(iii)}& \text{No Entry}& & & & \\ \text{(iv)}& \text{No Entry}& & & & \\ \text{(v)}& \text{Realisation A/c}& \text{Dr.}& & 20,000& \\ & \text{To Bank A/c}& & & & 20,000\\ & \text{(Payment made to unrecorded creditor)}& & & & \\ \text{(vi)}& \text{P's Loan A/c}& \text{Dr.}& & 50,000& \\ & \text{To Realisation A/c}& & & & 50,000\\ & \underset{–}{\text{(P's Loan transferred to Realisation account)}}& & & & \\ & \text{Realisation A/c}& \text{Dr.}& & 15,000& \\ & \text{To Bank}& & & & 15,000\\ & \text{(P's loan settled by giving unrecorded asset of}& & & & \\ & \text{Rs 35,000 and the balance in Cash)}& & & & \end{array}$