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\begin{array}{l}\phantom{27)}\phantom{1}\\27\overline{)86}\\\end{array}
Use the 1^{st} digit 8 from dividend 86
\begin{array}{l}\phantom{27)}0\phantom{2}\\27\overline{)86}\\\end{array}
Since 8 is less than 27, use the next digit 6 from dividend 86 and add 0 to the quotient
\begin{array}{l}\phantom{27)}0\phantom{3}\\27\overline{)86}\\\end{array}
Use the 2^{nd} digit 6 from dividend 86
\begin{array}{l}\phantom{27)}03\phantom{4}\\27\overline{)86}\\\phantom{27)}\underline{\phantom{}81\phantom{}}\\\phantom{27)9}5\\\end{array}
Find closest multiple of 27 to 86. We see that 3 \times 27 = 81 is the nearest. Now subtract 81 from 86 to get reminder 5. Add 3 to quotient.
\text{Quotient: }3 \text{Reminder: }5
Since 5 is less than 27, stop the division. The reminder is 5. The topmost line 03 is the quotient. Remove all zeros at the start of the quotient to get the actual quotient 3.