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If the initial credit balance in a retiring partner’s loan account is ₹2,00,000 and ₹50,000 is paid during the year as principal only, what is the remaining principal loan?

Answer and explanation

Correct answer: ₹1,50,000

Because the payment is stated to be principal only, the entire ₹50,000 reduces the outstanding principal; no interest adjustment is involved. The remaining principal is calculated as ₹2,00,000 − ₹50,000 = ₹1,50,000. Therefore, option A is correct. Option B ignores the repayment, option C shows only the amount paid, and option D incorrectly adds the payment.

Related tags

Partner Loan AccountPrincipal RepaymentRemaining LoanRetirementPartner's Loan AccountPartner S Loan AccountReconstitution Retirement Or Death Of A PartnerAccountancy

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