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If a loan from a partner appears on the liabilities side of the Balance Sheet of the firm and the Capital Account of such partner shows a debit balance after all adjustment, how is loan dealt with?

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Loan from partner refers to loan given by partner to the firm, this amount is not included in his/her capital.
The amount of loan from partners is just like a loan from a third party.
Loan provided by a partner is a liability of the firm which is paid to the partner before further adjustment.
In case of retirement/ death of a partner, if a partner has debit capital balance, so debit balance amount is adjusted or set off against the loan amount

Answer:
The amount of loan is adjusted or set off against the debit balance of partner capital. If the amount is exceeded to the loan amount then the partner has to bring cash into the firm.

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