T.S. Grewal Class 12 Chapter 5 Q.39 - Retirement of a Partner

Question 39

Rakesh retired from the firm. The amount due to him was determined at ₹90,000. It was decided to pay this amount as follows: ₹30,000 on the date of retirement, and the balance in three yearly instalments – the first two instalments being ₹26,000 each (including interest), and the balance amount as the last instalment. Interest was payable @ 10% p.a. Prepare Rakesh’s Loan Account.

Solution

RAKESH’S LOAN ACCOUNT

Date	₹	Date	₹
Year I
To Bank A/c (20,000 + 6,000)	26,000	By Rakesh’s Capital A/c	60,000
To Balance c/d	40,000	By Interest on Loan A/c (60,000 × 10%)	6,000
Total	66,000	Total	66,000
Year II
To Bank A/c (22,000 + 4,000)	26,000	By Balance b/d	40,000
To Balance c/d	18,000	By Interest on Loan A/c (40,000 × 10%)	4,000
Total	44,000	Total	44,000
Year III
To Bank A/c (18,000 + 1,800)	19,800	By Balance b/d	18,000
		By Interest on Loan A/c (18,000 × 10%)	1,800
Total	19,800	Total	19,800

Amount transferred to Loan Account after the initial payment of ₹30,000 = ₹90,000 – ₹30,000 = ₹60,000.