Question

What Journal entry is passed when an asset is given to any of the firm's creditors towards partial payment of dues?

Answer 1

Realisation A/C.............. Dr.

To Bank A/C

(Being the asset given to creditor towards partial payment of dues)

Note: For partial payment of dues, the amount that will be shown in the realisation account will the amount remaining after taking over the asset, i.e, (amount due - value of asset).