Read, write and Add are partners. P&L Sharing Ratio: 4:2:3
In their Balance sheet, there is Joint Life Policy in Asset Side and
Joint Life Policy Reserve in the Liability Side.
In additional info:
a. Add had taken a loan from insurers for Rs5,000 on the security of Joint Life Policy.
The policy was surrendered and insurers paid a sum of Rs10,200 after deducting Rs5,000 for. Add's loan and Rs300 as interest thereon.
What is the accounting treatment in respect of the above details.
[From CA IPCC Adv Accounts Practise Manual Page no.3.7 Question no.3]