Realization Account 

Debit AmountsCredit Amounts
To Asset A/c ( at book value ) individually

To Bank A/c (actual payment of liability)

To Partner’s Capital A/c (liability taken over at agreed value)

To Bank A/c (unrecorded liability paid)

To Bank A/c (realization expenses paid)

To Partner’s Capital A/c (Agreed Remuneration )

To Partners’ Capital A/c (profit on realization distributed in profit sharing ratio)***

By External liability A/c (at book value)individually

By Bank A/c (asset actually realized)

By Partner’s Capital A/c (asset taken over at agreed value)

By Bank A/c (unrecorded asset realized)

By Investment Fluctuation Reserve A/c (book value)*

By Workmen Compensation Reserve A/c (book value)*

By Employees Provident Fund A/c (book value)**

 

                                       Capital Accounts of the Partners

Debit AmountsCredit Amounts
To Current A/c ( debit)

To Accumulated Losses

To Realization A/c (asset taken over)

To Realization A/c (loss on realization)

To Bank A/c (Balancing figure-payment)

 

By Balance B/d (opening balance)

By Current A/c ( credit)

By Accumulated Profits/Reserves

By Realization A/c (liability taken over)

By Realization A/c ( remuneration for realization)

By Realization A/c (profit on realization)

By Bank( Balancing figure-receipt)

 

 

                                                  Bank Account

Debit AmountsCredit Amounts
To Balance B/d (opening balance)

To Cash (b/d)

To Realization A/c ( Assets sold)

To Partner's Capital A/c (brought)

By Realization A/c ( Liabilities paid)

By Partner’s Loan A/c ( Repayment)

By Realization A/c ( realization expenses paid)

By Partners’ Capital A/c (repayment)

 

 

                                                 Partner’s Loan account

Debit AmountsCredit Amounts
To Bank ( if paid)

To Partner’s Capital A/c ( if transferred to Capital)

By Balance B/d (opening balance)

 

Realisation Expenses on Dissolution of Firm