Question

At the time of dissolution of partnership firm, journal entry for the settlement of loan advanced by the firm to
a partner would be:
a Bank A/c Dr.
To Loan to Partner A/c
b Loan to partner A/c Dr.
To Bank A/c
c Realization A/c Dr.
To Loan to Partner A/c
d None of these

Answer 1

Answer:

Realisation A/c Dr.

To Loan to partner A/c

Answer 2

A) Bank A/c To Loan to Partner A/c

• The dissolution of a partnership firm is what happens when there is a change in business relationships between partners with leads to the dissolution of a partnership. Dissolution cannot take place without the intervention of the court. When a dissolution happens, the firm ceases to conduct business and has to settle its account.
• A bank account is a financial account maintained by a bank or any other financial institution where financial transactions that take place between the bank and a customer are recorded.
• A loan is a large sum of money that is provided to a business in order to carry out any financial propositions.
• A partnership capital account is an account that contains the transactions occurring between the partners and partnership firms. The initial contribution of capital in partnership includes capital paid, drawings, profits, and more.

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