How to prepare executor loan account

1. When the partner dies, the amount payable to him is paid to his/her legal representatives.

2. The representatives of deceased partner is entitled to the followings:

(a) The amount standing to the credit to the capital account and the deceased partner.

(b) Interest on capital, if provided in the partnership deed, upto the date of death:

(c) share of the value of goodwill of the firm; ‘

(d) share of undistributed profit or reserves;

(e) share of profit on the revaluation of assets and liabilities;

(f) share of profit upto the date of death;

(g) share of Joint Life Policy.

The following amounts are debited to the account of the deceased partner’s legal representatives:

(i) Drawings

(ii) Interest on drawings

(iii) share of loss on the revaluation of assets and liabilities;

(iv) share of loss that have occurred till the date of his/her death