how to treat joint life policy in dissolution of partnership when surrender value is given - Accountancy - Dissolution of Partnership Firm

Question

how to treat joint life policy in dissolution of partnership
when surrender value is given ?

Isha Sehgal · Accepted Answer

If Joint Life Policy (JLP) and Joint Life Policy Reserve (JLP
Reserve) both are given in the Balance Sheet , then first of all
transfer JLP to debit side and JLP Reserve to credit side of
Realisation A/c and if Surrender Value is also
given then the realised value (i e surrender value received from
insurance company) will also be shown on the credit side of
Realisation A/c (at surrender value) This entry will also be shown
on the debit side of Bank A/c (double entry system of
accounting)
JOURNAL ENTRIES:

Journal

Date

Particulars

L F

Debit Amount

Rs

Credit Amount

Rs

1

Realisation A/c

Dr

To Joint Life Policy A/c

(being the amount of Joint Life Policy transferred to Realisation
a/c)

2

JLP Reserve A/c

Dr

To Realisation A/c

(being Joint Life Policy Reserve transferred to Realisation
A/c)

3

Bank A/c

Dr

To Realisation A/c

(being surrender value received from insurance company)

	Journal
Date		Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
1.		Realisation A/c	Dr.
		To Joint Life Policy A/c
		(being the amount of Joint Life Policy transferred to Realisation a/c)

2.		JLP Reserve A/c	Dr.
		To Realisation A/c
		(being Joint Life Policy Reserve transferred to Realisation A/c)

3.		Bank A/c	Dr.
		To Realisation A/c
		(being surrender value received from insurance company)

how to treat joint life policy in dissolution of partnership when surrender value is given ?