Question

How is amount due to a retiring partner settled? (Answer in one sentence)

Answer 1

AMOUNT WHICH IS DEBITED ON RETIRE PARTNER CAPITAL AC

Answer 2

Answer:

Settlement of the amount due to a retiring partner.

Explanation:

The amount due to retiring partner is either paid off immediately or it is transferred to his loan account. The Retiring Partner's loan account will appear in the books of a new firm as a liability until it is paid off finally. The settlement is to be done as directed in the partnership contract. The amount due to the retiring partner is to be settled in if he paid off or his amount is transferred to his loan account.