Question

18. Amar and Bimal entered into partnership on 1st April, 2016 contributing 1,50,000 and 2,50,000
respectvely towards capital. The Partnership Deed provided for interest on capital @ 10% p.a. It also
provided that Capital Accounts shall be maintained following Fixed Capital Accounts method. The firm
earned net profit of ? 1,00,000 for the year ended 31st March, 2017.
Pass the Journal entry for interest on capital. Ans.: Dr. Profit and Loss Appropriation A/c by 40,000;
Amar's Current Alchy 715 000 and Rimal's Current A/s by 325,000.​

Answer 1

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