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Deficiency borne by Partner A
what is the journal entries for deficiency borne by Partner A because of guarantee given to C by A
Replies (1)
The deficiency is debited to A
Distribution of profits
Dr. P&L 15000
Cr A 10000
Cr C 5000
The loss of C 5000
Dr C 5000
Cr PL 5000
This is the usual method. When you have a deficienacy of 5000 but guaranteed by A to cover your loss
Dr. A 5000
Cr C 5000
These are capital accounts.
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