Record necessary journal entries in the following cases:

[a] Creditors worth Rs 85,000 accepted Rs 40,000 as cash and Investment worth Rs 43,000, in full settlement of their claim.

[b] Creditors were Rs 16,000. They accepted Machinery valued at Rs 18,000 in settlement of their claim.

[c] Creditors were Rs 90,000. They accepted Buildings valued Rs 1,20,000 and paid cash to the firm Rs 30,000.

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Solution

Journal

Particulars

L.F.

Amount

Rs

Amount

Rs

(a)

Realisation A/c

Dr.

40,000

To Cash A/c

40,000

(Creditors worth Rs 85,000 accepted 40,000 as cash and investment

worth Rs 43,000 in their full settlement)

(b)

No Entry

(Creditors Rs 16,000 accepted Machinery Rs 18,000 in the full

settlement. No entry is required since both asset and liability are

already transferred to the Realisation Account)

(c)

Cash A/c

Dr.

30,000

To Realisation A/c

30,000

(Creditors worth Rs 90,000 accepted buildings worth Rs 1,20,000 and

returned Rs 30,000 as cash after settlement of claim to the firm)

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Similar questions

Record necessary journal entries in the following cases

(a) Creditors worth Rs. 85,000 accepted Rs. 40,000 as cash and investment worth Rs. 43,000, in full settlement of their claim.

(b) Creditors were Rs. 16,000. They accepted Machinery valued at Rs. 18,000 in settlement of their claim.

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

Q. 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.

L and M were partners in a firm sharing profit in the ratio of 2 :3. On 28-2-2016 the firm was dissolved. After transferring assets (other than cash) and outsiders' liabilities to realisation account you are given the following information :

(a) A creditor for Rs. 1,40,000 accepted building valued at Rs 1,80,000 and paid to the firm Rs. 40,000.

(b) A second creditor for Rs. 30,000 accepted machinery valued at Rs. 28,000 in full settlement of his claim.

(c) A third creditor amounting to Rs. 70,000 accepted Rs. 30,000 in cash and investments of the book value of Rs. 45,000 in full settlement of his claim.

(d) Loss on realisation was Rs 4,000.

Pass necessary Journal entries for the above transactions in the books of the firm assuming that all payments were made by cheque.

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.

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Journal
	Particulars		L.F.	Amount Rs	Amount Rs
(a)	Realisation A/c	Dr.		40,000
	To Cash A/c				40,000
	(Creditors worth Rs 85,000 accepted 40,000 as cash and investment worth Rs 43,000 in their full settlement)

(b)	No Entry
	(Creditors Rs 16,000 accepted Machinery Rs 18,000 in the full settlement. No entry is required since both asset and liability are already transferred to the Realisation Account)

(c)	Cash A/c	Dr.		30,000
	To Realisation A/c				30,000
	(Creditors worth Rs 90,000 accepted buildings worth Rs 1,20,000 and returned Rs 30,000 as cash after settlement of claim to the firm)