question_answer

A debtor who was declared insolvent by the court and whose dues of Rs. 80,000 were written off as bad debts, now promised to pay 50% of the amount. How would you record this item at the time of admission of a new partner?

A) Cr. Side of Revaluation A/c Rs. 40,000 and add same in cash/bank account

B) 80,000 Dr. Side of Revaluation A/c and 40,000 Cr. Side

C) 80,000 Dr. Side of Revaluation A/c and 40,000 in cash account

D) No Entry for Promise (no effect at all)