Madhav, Madhusudan and Mukund were partners in Jaganath Associates. They decided to dissolve the firm on 31st March 2021.
Pass necessary journal entries for the following transactions after various assets (other than cash) and third-party liabilities have been transferred to realization account:
(i) Old machine fully written as sold for ₹42,000 while a payment of ₹6,000 is made to bank for a bill discounted being dishonoured.
(ii) Madhusudan accepted an unrecorded asset of ₹80,000 at ₹75,000 and the balance through cheque, against the payment of his loan to the firm of ₹1,00,000.
(iii) Stock of book value of ₹30,000 was taken by Madhav, Madhusudan and Mukund in their profit sharing ratio.
(iv) The firm had paid realization expenses amounting to ₹5,000 on behalf of Mukund.
(v) There was a vehicle loan of ₹2,00,000 which was paid by surrender of asset to the bank at an agreed value of ₹1,40,000 and the shortfall was met from firm’s bank account.