Source : Webster's Revised Unabridged Dictionary (1913)

Liquidate \Liq"ui*date\ (l[i^]k"w[i^]*d[=a]t), v. t. [imp. & p.
   p. {Liquidated} (-d[=a]`t[e^]d); p. pr. & vb. n.
   {Liquidating}.] [LL. liquidatus, p. p. of liquidare to
   liquidate, fr. L. liquidus liquid, clear. See {Liquid}.]
   1. (Law) To determine by agreement or by litigation the
      precise amount of (indebtedness); or, where there is an
      indebtedness to more than one person, to determine the
      precise amount of (each indebtedness); to make the amount
      of (an indebtedness) clear and certain.

            A debt or demand is liquidated whenever the amount
            due is agreed on by the parties, or fixed by the
            operation of law.                     --15 Ga. Rep.
                                                  321.

            If our epistolary accounts were fairly liquidated, I
            believe you would be brought in considerable debtor.
                                                  --Chesterfield.

   2. In an extended sense: To ascertain the amount, or the
      several amounts, of, and apply assets toward the discharge
      of (an indebtedness). --Abbott.

   3. To discharge; to pay off, as an indebtedness.

            Friburg was ceded to Zurich by Sigismund to
            liquidate a debt of a thousand florins. --W. Coxe.

   4. To make clear and intelligible.

            Time only can liquidate the meaning of all parts of
            a compound system.                    --A. Hamilton.

   5. To make liquid. [Obs.]

   {Liquidated damages} (Law), damages the amount of which is
      fixed or ascertained. --Abbott.