pg.6.66)t.s grewal accounts-part 1 (dissolution)
qn.42)can you explain how a's loan and b's loan is being treated the way it is?

Dear Student

It is given that :
1. The firm has taken a loan from A amounting to Rs 1,00,000/-
2. The Firm has given loan to B amounting to Rs 20,000/-.

Treatment :
On dissolution the loan taken form partner is paid in Cash after paying all the external liabilities, therefore A's Loan is paid in cash.
And the loan taken by partner or loan given to the partner is transferred to his capital account, this means that we are adjusting capital payable to him against loan amount receivable.
Therefore B's Loan was transferred to his capital account for being adjusted against capital.

Hope this helps

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