When a partnership firm is dissolved, the final settlement involves paying the remaining amount due to partners from their Capital Accounts.
The journal entry for final payment to partners is:
Partners' Capital A/c Dr.
To Bank A/c
The payment to partners is transferred to Bank A/c because cash or bank balance is paid out to settle their capital balances.
The sequence during dissolution is:
Realisation A/c → handles sale of assets and payment of liabilities
Profit/Loss on realisation → transferred to Partners' Capital A/c
Partners' Capital A/c → final balance paid through Bank A/c
Since Bank A/c is credited (cash goes out) when making the final payment to partners, the payment is transferred to Bank A/c.
The correct option is 4: Bank A/c