What journal entry will be passed when a firm pay realisation expenses on behalf of the partnerswWho is to bear the expenses?

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Solution

Dear Student

In a case when partners are to bear expenses and firm pays it on behalf of them, then here firm shall recover the amount from partners and the journal entry would be passed by debiting partners capital account as follows :

Partners Capital A/c Dr. xxx

To Cash A/c xxx

(Being expenses of realization paid on behalf of partners)

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Similar questions

Pass journal entries for the following transactions :

(i) Realisation expenses amounted to Rs. 5,000.

(ii) Realisation expenses amounted to Rs. 8,000 were paid by partner X.

(iii) Realisation expenses amounted to Rs. 10,000 were paid by the firm on behalf of a partner.

(iv) Realisation expenses amounted to Rs. 15,000 were paid by the firm. Mr. X, one of the partners, has to bear these expenses.

(v) Realisation expenses amounted to Rs. 20,000 were paid by the firm. Rs. 8,000 were to be borne by the firm and the balance by Maruti, a partner.

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Partners Capital A/c	Dr.	xxx
To Cash A/c			xxx
(Being expenses of realization paid on behalf of partners)