If part of the amount due to a retiring partner is settled by giving machinery, what should be done while finding the loan account amount?

Correct answer: Deduct machinery settlement from amount due

The direct answer is A: deduct the machinery settlement from the amount due. First determine the total amount payable to the retiring partner, including any approved adjustments. If machinery is transferred to the partner as part payment, that transfer settles part of the liability immediately. Therefore, the remaining amount to be placed in or paid through the loan account equals total amount due minus the value of machinery given. Option A is correct because it prevents recording the same settlement twice. Option B is wrong because machinery is an asset used for settlement, not interest. Option C is wrong because giving machinery is not automatically profit; any gain or loss on disposal must be treated separately according to its book value and agreed value. Option D is wrong because the new profit-sharing ratio is irrelevant to settling this personal liability. Exam cue: asset given to a creditor is still payment, even when no cash leaves the bank.