If the asset is taken over by the creditor in lieu of the amount due to him, then the journal entry will be:

When an asset is taken over by a creditor in settlement of his dues during dissolution of a partnership firm, the accounting treatment requires understanding the sequence of events.

During dissolution, two entries have already been passed:

First Entry (Asset Transfer):

Realisation A/c is debited and Asset A/c is credited when assets are transferred to Realisation Account.

Second Entry (Creditor Transfer):

Creditor A/c is debited and Realisation A/c is credited when creditors are transferred to Realisation Account.

When the creditor takes over the asset in settlement of his claim, this is considered an internal adjustment within the Realisation Account. The asset disposal and creditor settlement both affect the Realisation Account on opposite sides, which nets off internally.

Since both the asset (already in Realisation A/c) and the creditor's claim (already transferred to Realisation A/c) are being adjusted against each other, no additional journal entry is required at the time of takeover.

The Realisation Account automatically reflects:

• Asset disposal (Debit side reduces)
• Creditor settlement (Credit side reduces)

This is why the answer is Option 3: No entry - the transaction is already accounted for through the initial transfer entries, and the actual takeover is merely an execution of what has been recorded in the Realisation Account.