If a partner brings a vehicle of Rs 300000 as capital and the firm accepts a loan of Rs 80000 on it how much will be credited to capital account?

Correct answer: Rs 220000

The direct answer is option A: Rs 220000. When a partner brings an asset as capital and the firm also accepts a liability attached to that asset, the partner’s net contribution is the asset value less the liability taken over by the firm. Step 1: vehicle value is Rs 300000. Step 2: loan accepted by the firm is Rs 80000, so the firm has effectively assumed an obligation of that amount. Step 3: net capital credited to the partner is Rs 300000 − Rs 80000 = Rs 220000. The related accounting idea is that the vehicle is recorded as an asset for Rs 300000, the loan is recorded as a liability for Rs 80000, and the partner’s capital is credited for the net amount of Rs 220000. Option A is correct. Option B ignores the loan liability and credits the full vehicle value. Option C records only the liability, not the partner’s net contribution. Option D adds the asset and liability, but a liability assumed reduces, not increases, the partner’s net capital. Memory cue: capital introduced with an attached liability equals asset value minus liability.