what is treatment of partner"s commission in dissolution of firm

Commission to a partner at the time of Dissolution of Partnership firm is paid for meeting realisation Expenses. Therefore, following Journal Entry have been passed:

   ‚ÄčJournal Entry
Date Particulars L.F. Debit Amount
Credit Amount
  Realisation A/c Dr      
    To Partner’s Capital A/c        
  (Realisation Expenses are born and paid by partner)        

  • 3


  • -1

Partner's commission for realisation services:

Such commission is debited to Realisation A/c and credited to the concerned Partner's Capital A/c. This is because it is also a realisation expense which incurred for selling assets/ paying liabilities.

  • 2
What are you looking for?