In case of Fixed Capital Method, at the time of dissolution of a firm, An un-recorded asset are taken over by a partner, which Journal Entry will be recorded in the books of the Partnership Firm :-

At the time of dissolution, when an unrecorded asset is taken over by a partner, the partner becomes a debtor to the firm for the value of that asset.

Since it's an unrecorded asset, it was never recorded in the books, so it won't appear in the initial transfer to Realisation Account. When the partner takes it over, we need to:

1. Recognize that the asset has been disposed of (credit to Realisation Account)
2. Show that the partner owes the firm for this asset

The journal entry will be:

Partner's Current Account Dr.

To Realisation Account

The key point here is the Fixed Capital Method. In this method:

• Capital Account remains fixed and is used only for permanent changes
• All adjustments, drawings, and transactions (including taking over assets) are recorded through the Current Account

If this were Fluctuating Capital Method, the entry would have been through Partner's Capital Account (Option 3). However, since the question specifically mentions Fixed Capital Method, the correct entry uses the Current Account.

The partner's Current Account is debited because the partner is taking an asset of the firm, creating a liability to pay for it. The Realisation Account is credited because the asset has been disposed of (given to the partner).

Correct Option: 4