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When the loan account of a retiring or deceased partner is settled through the bank, which entry is made in the Bank Account?

Answer and explanation

Correct answer: Credit

When the loan is paid through the bank, money leaves the bank and the bank balance decreases. Therefore, the Bank Account is credited. The Loan Account is debited, but the Bank Account is not debited. Exam tip: Any payment made through the bank generally credits the Bank Account.

Related tags

Partner Loan AccountRetirement Of PartnerDeath Of PartnerBank AccountJournal EntriesPartner's Loan AccountPartner S Loan AccountReconstitution Retirement Or Death Of A Partner

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