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The retiring partner's loan account has a balance of ₹2,20,000. If an installment of ₹90,000 is paid and there is no interest, what amount will remain in the loan account?

Answer and explanation

Correct answer: ₹1,30,000

When there is no interest, the paid installment is deducted from the loan balance: ₹2,20,000 − ₹90,000 = ₹1,30,000. Therefore, option A is correct. Option C ignores the repayment, while option D incorrectly adds it. Exam tip: Deduct every installment paid from the loan balance unless interest or another adjustment is specifically given.

Related tags

Partners-LoanRetirement-Of-PartnerLoan-AccountInstallmentAccountancyPartner's Loan AccountPartner S Loan AccountReconstitution Retirement Or Death Of A Partner

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