Nayana and Arushi were partners sharing profits equally Their Balance Sheet as on March 31, 2017 was as follows:

The firm was dissolved on the above date:
1. Nayana took over 50% of the stock at 10% less on its book value, and the remaining stock was sold at a gain of 15%. Furniture and Machinery realised for Rs.30,000 and Rs.50,000 respectively,
2. There was an unrecorded investment which was sold for Rs. 25,000,
3. Debtors realised 90% only and Rs.1,200 were recovered for bad debts written-off last year,
4. There was an outstanding bill for repairs which had to be paid for Rs.2,000.
Record necessary journal entries and prepare ledger accounts to close the books of the firm.

Explanation