When a partnership is liquidated,the journal entry to pay the claims of creditors would include:

Question

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When a partnership is liquidated, the claims of creditors are paid off. The journal entry for paying off the creditors would include a debit to each individual creditor's account (choice B) and a credit to cash for the amount paid (choice C). Therefore, the correct answer is D, which includes both choices B and C. There would not be a debit to Cash (choice A) as the credit to Cash would be sufficient to record the transaction.

When a Partnership Is Liquidated,the Journal Entry to Pay the Claims