Question

What would be the journal entry of when a retiring partner's whole amount is treated as a loan?

Options

• Retiring Partner's Capital A/c Dr To Retiring Partner's Loan A/c

• Retiring Partner's Loan A/c Dr To Retiring Partner's Capital A/c

• Both Retiring Partner's Capital A/c Dr To Retiring Partner's Loan A/c and Retiring Partner's Loan A/c Dr To Retiring Partner's Capital A/c.

• None of these

Answer 1

Retiring Partner's Capital A/c Dr To Retiring Partner's Loan A/c

Explanation:

When the entire sum due to the retiring partner is treated as a loan. Capital Account of Retiring Partner Loan Account For Retiring Partner.