Question

Ajit and James are partners in a firm sharing profits in the ratio of 3:5. Their fixed capitals

were Rs.2,50,000 and Rs.4,50,000 respectively. After the final accounts of the year had been

closed, it was found that interest on capital at 10% per annum as provided in the partnership

agreement has not been credited to the capital accounts of the partners. Give necessary

adjustment entry.​

Answer 1

Answer:

Cash A/c.........Dr. 700000

To Ajit's Cap.A/c 250000

To James's Cap. A/c 450000

(Being capital invested )

Interest on Cap.A/c........Dr. 25000

To Ajit's Cap. A/c 25000

(Being interest charged)

Interest on Cap.A/c........Dr. 45000

To James's Cap. A/c 45000

(Being interest charged)