how to treat joint life policy in dissolution of partnership when surrender value is given ?

If Joint Life Policy (JLP) and Joint Life Policy Reserve (JLP Reserve) both are given in the Balance Sheet , then first of all transfer JLP to debit side and JLP Reserve to credit side of Realisation A/c and if Surrender Value is also given then the realised value (i.e. surrender value received from insurance company) will also be shown on the credit side of Realisation A/c (at surrender value). This entry will also be shown on the debit side of Bank A/c (double entry system of accounting). 

JOURNAL ENTRIES:

 

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 1.

Realisation A/c 

Dr.

 

 

 

 

 To Joint Life Policy A/c

 

 

 

 

 

(being the amount of Joint Life Policy transferred to Realisation a/c)

 

 

 

 

 

 

 

 

 

 

 2.

JLP Reserve A/c 

 Dr.

 

 

 

 

 To Realisation A/c

 

 

 

 

 

(being Joint Life Policy Reserve transferred to Realisation A/c)

 

 

 

 

 

 

 

 

 

 

 3. 

Bank A/c 

 Dr.

 

 

 

 

 To Realisation A/c

 

 

 

 

 

(being surrender value received from insurance company)

 

 

 

 

 

 

 

 

 

 

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