Arrange the following items in the correct order of priority for application of the firm's assets on dissolution:
(i) In paying the debts of the firm to third parties
(ii) In paying each partner what is due on account of capital
(iii) In paying each partner what is due for advances (loan)
(iv) Division of the residue among partners
1
(i), (ii), (iii), (iv)
2
(i), (iii), (ii), (iv)
3
(ii), (i), (iii), (iv)
4
(iii), (i), (ii), (iv)