X and Y are partners in a shring profits in the ratio of 3 : 2. They admitted Z as a partner for 1/4th share of profits. At the time of admission of Z, Debtors and Provision for Doubtful Debts appeared at RS.76,000 and RS.8,000 respectively. RS.6,000 of the debtors proved bad. A provision of 5% is to be created on Sundry Debtors for doubtful debts. Pass the necessary Journal entries.

Explanation

(i) Dr. Bad Debts A/c and Cr. Debtors A/c by RS.6,000.
(ii) Dr. Provision for Doubtful Debts A/c and Cr. Bad Debts A/c-RS.6,000.
(iii) Dr. Revaluation A/c and Cr. Provision for Doubtful Debts-RS.1,`500^(**)`. `5^(**)//100(RS.76,000-RS.6,000)-(RS.8,000-RS.6,000)=RS.1,`500^(**)`
(iv) Dr.X's Capital A/c-RS.900 and Y's Capital A/c RS-600, Cr. Revaluation A/c-RS.1,500.