Adiraj and Karan were partners in a firm sharing profits and losses in the ratio 3 : 2. On 31st March, 2018 the firm was dissolved. After the transfer of assets (other than cash in hand and at bank) and third party liabilities to the Realization Account, the following information was provided:
(i) Furniture of Rs. 70,000 was sold for Rs. 68,000 by auction and auctioneer’s commission amounted to Rs. 2,000.
(ii) Adiraj’s loan amounting to Rs. 35,000 was paid.
(iii) Out of the stock of Rs. 80,000, Karan took over 50% of the stock at a discount of 20% while the remaining stock was sold off at a profit of 30% on cost.
(iv) A bills receivable of Rs. 3,000 under discount was dishonoured as the acceptor had become insolvent and hence the bill had to be met by the firm.
(v) Profit and Loss Account showed a debit balance of Rs. 56,000.
(vi) Realization expenses amounted to Rs. 2,000 which were paid by Adiraj.
Pass the necessary journal entries for the above transactions on the dissolution of the firm.