Transaction

Entry

Amount

1. For Transfer of Realizable Asset to Realisation A/c

Realisation A/c……….Dr.

   To Respective Assets A/c

(Assets transferred to Realisation A/c)

Debit

Credit

2. For Transfer of Outside liabilities to Realisation A/c

Respective Liabilities A/c……….Dr.

   To Realisation A/c

(Liabilities transferred to Realisation A/c)

Debit

Credit

3. For Sale of assets (recorded/unrecorded) on cash

Cash A/c……….Dr.

      To Realisation A/c

(Amount realised on sale of assets)

Debit

Credit

4. For assets (recorded/ unrecorded) taken over by a Partner

Respective Partner’s Capital A/c……….Dr.

      To Realisation A/c

(Asset taken over by Partner)

Debit

Credit

5. For Settlement of liabilities (recorded /unrecorded) in cash

Realisation A/c……….Dr.

      To Cash/Bank A/c

(Settlement of liabilities in cash)

Debit

Credit

6. For liabilities (recorded/unrecorded) taken over by a Partner

Realisation A/c……….Dr.

      To Respective Partner’s Capital A/c

(Liability taken over by Partner)

Debit

Credit

7. Settlement of Liability in exchange of assets of equivalent amount

No Entry

8. For settlement of Liability in exchange of asset (Liability > Asset). Balance settled in cash

Realisation A/c……….Dr.

      To Cash/Bank A/c

(Settlement of liabilities in cash)

Debit

Credit

9. For settlement of Liability in exchange of asset (Asset > Liability). Balance received in cash

Cash/Bank A/c……….Dr.

      To Realisation A/c

(Amount realised on sale of assets)

Debit

Credit

10. Closure of Realisation A/c and Credit > Debit (means profit)

Realisation A/c……….Dr.

      To Partners’ Capital A/c

(Profit on Realisation transferred to Partners Capital A/c)

Debit

Credit

11. Closure of Realisation A/c and Debit > Credit (means loss)

Partners’ Capital A/c……….Dr.

      To Realisation A/c

(Loss on Realisation transferred to Partners Capital A/c)

Debit

Credit