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On 31st March 2010 P, Q and R are three partners in a firm, sharing profits and losses in the ratio of 4 : 3 : 2. Now they have decided to share profits and losses equally. What will be the journal entry if the surrender value of Joint Life Policy is Rs. 2,70,000 and Joint Life Policy is not appearing in the books and partners have decided to show it in the books of the new firm.

 
No entry is required to be made
R's Capital A/c Dr 30,000
To P's Capital A/c 30,000
Joint Life Policy A/c Dr 2,70,000
To P's Capital A/c 1,20,000
To Q,s Capital A/c 90,000
To R's Capital A/c 60,000
None of the above

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Rs 60,000 in the explanation should be on credit side (i.e. right hand column).