Why loan account is transferd to capital account?

Why loan account is transferd to capital account? would finally be settled among the partners. (Ans.: Loss on Realisation—t 3,000; cash paid to A, B and 25,000; 28,000; 78,000 30. Yogeshand Naresh were partners sharing profits equally-They dissolved the firm on 1 st April, 2019.Nare was assigned the responsibility to realise the assets and pay the liabilities at a remuneration of R including expenses. Balance Sheet of the firm as on that date was as follows: 32. Liabilities Creditors Bills Payable NareshS Loan Mrs. YogesWs Loan Investment Fluctuation Reserve Capital A/cs: Yogesh Naresh 40,000 40,000 44,000 42,000 8,000 42,000 Assets Cash/Bank Investments Debtors Less: Provision for Doubtful Debts Bills Receivable Profit and Loss A/c .L 40000 4,000 6.0 36, 334 toar 21,000 21,000 The firm was dissolved on following terms: (a) Yogesh was to pay his wife's loan. (b) Debtors realised 30,000. (c) Naresh was to take investments at an agreed value oft 26,000. (Y Creditors and Bills Payable were payable after two months but were paid immediately at a of 15% p.a. e) Bills Receivable were received allowing 5% rebate. (f) A Debtor previously written off as Bad Debt paid 15,000. (g) A? unrecorded asset realised 10,000. Prepare*ealisation Account, Partner's Capital Accounts, Partner's Loan Account and Cash/Bank [Ans.: Realisation Gain—t 13,330; Final Payment to Yogesh—? 14,365; Naresh—Nil; Loan of transferred to Naresh& Capital A/c—? 43,635; Repayment of Loan—

Since yogesh is admitted as a partner now and thus loan taken by the firm from him is tranferred into his capital . Accounting treatment Yogesh loan acct dr To yogesh capital acct. Thanx
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