Charu, Dhwani, Iknoor and Paavni were partners in a firm. They had entered into partnership firm last year only, through a verbal agreement. They contributed Capitals in the firm and to meet other financial requirements, few partners also provided loan to the firm. Within a year, their conflicts arisen due to certain disagreements and they decided to dissolve the firm. The firm had appointed Ms. Kavya, who is a financial advisor and legal consultant, to carry on the dissolution process. In the first instance, Ms. Kavya had transferred various assets and external liabilities to Realisation A/c. Due to her busy schedule; Ms. Kavya has delegated this assignment to you, being an intern in her firm. On the date of dissolution, you have observed the following transactions:
- Dhwani’s Loan of ₹50,000 to the firm was settled by paying ₹42,000.
- Paavni’s Loan of ₹40,000 was settled by giving an unrecorded asset of ₹45,000.
- Loan to Charu of ₹60,000 was settled by payment to Charu’s brother loan of the same amount.
- Iknoor’s Loan of ₹80,000 to the firm and she took over Machinery of ₹60,000 as part payment.
You are required to pass necessary entries for all the above mentioned transactions.