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Question

Record necessary Journal entries in the following cases:
(a) Creditors worth ₹ 85,000 accepted ₹ 40,000 as cash and Investment worth ₹ 43,000, in full settlement of their claim.
(b) Creditors were ₹ 16,000. They accepted Machinery valued at ₹ 18,000 in settlement of their claim.
(c) Creditors were ₹ 90,000. They accepted Building valued at ₹ 1,20,000 and paid cash to the firm ₹ 30,000.


Solution

Journal
 
 
Particulars
L.F.
Amount
(₹)
Amount
(₹)
(a)
Realisation A/c
Dr.
 
40,000
 
 
To Cash A/c
     
40,000
 
(Creditors worth Rs 85,000 accepted 40,000 as cash and investmentworth Rs 43,000 in full settlement)
     
         
(b)
No Entry
       
 
(Creditors worth Rs 16,000 accepted Machinery worth Rs 18,000 in fullsettlement. No entry as both asset and liability arealready transferred to the Realisation Account)
     
         
(c)
Cash A/c
Dr.
 
30,000
 
 
To Realisation A/c
     
30,000
 
(Creditors worth Rs 90,000 accepted Building worth Rs 1,20,000 and paid backRs 30,000 as cash after settlement of claim to the firm)
     

Accountancy
TS Grewal Vol. I (2019)
All

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