A and B are partners sharing profits and losses equally. Their Balance Sheet as at 31st March, 2019 is given below:

C is admitted as a partner for 1/4th share on 1st April, 2019, under the following terms:
(i) C is to introduce RS.2,50,000 as capital.
(ii) Goodwill is agreed to be nil.
(iii) It is found that the creditors included a sum of RS.15,000 which was not to be paid.
(iv) A liability of compensation to workmen amounting to RS.20,000.
(v) Provision for doubtful debts is to be created @10% on debtors.
(vi) It was decided to henceforth follow fluctuating capital method.
(vii) Bills accepted worth RS.40,000 issued by creditors were not recorded in the books.
(viii) A provides RS.1,00,000 loan to the business' Current Accounts, Partners' Capital Accounts and Balance Sheet of the new firm.

Explanation

Note: Bills accepted of RS.40,000 issued by creditors do not affect Revaluation Account because this transaction increases one liablility, i.e., Bills Payable and decreases another liability, i.e., creditores. Accounting entry will be as follows:
`{:("Creditors A/c",...Dr.,"RS.40,000",),("To Bills Payable A/c",,,"RS.40,000"):}`