P, Q and R were partners. On 31st March 2022 their balance sheet showed creditors ₹2,33,000 and debtors ₹4,00,000. On the above date the firm was dissolved. Creditors took over all the debtors in full settlement of their claim. The journal entry for this transaction will be:

Correct option is D

The correct option is  (d) No entry will be passed.
In the context of firm dissolution, when a liability (creditors) settles its claim by taking over an asset (debtors), and the full settlement covers the entire claim of the liability, no journal entry is recorded in the books for this specific transaction.
The underlying principle in dissolution accounting is that once all assets have been transferred to the debit side of the Realisation Account and all external liabilities have been transferred to the credit side, any inter-settlement between an asset and a liability outside the flow of cash does not require a further journal entry. The effect of the settlement is implicitly captured by the initial transfer entries.
The journal entry to transfer the accounts to the realisation account would have been:
· Realisation A/c Dr. ₹4,00,000
· To Debtors A/c ₹4,00,000
· Creditors A/c Dr. ₹2,33,000
· To Realisation A/c ₹2,33,000
When the creditors take over the debtors in full settlement, the transaction itself is simply noted in the working papers, but no further entry is passed in the main ledger accounts.