Question

Interest on partner's loan will be ______ to ________account credited to P&L a/c debited to P&L a/c ​

Answer 1

Answer:

Debited , Profit

Explanation:

Profit and loss appropriation account is opened to show the distribution of net profit among the partners. It is an extension of profit and loss account.

Profit and loss appropriation account is debited with items that are appropriation of profits. An appropriation of profit is the distribution of net profit.  Interest on loan by partner is also an appropriation of profit. So,it is debited to profit and loss appropriation account.

Answer 2

Explanation:

Interest on loan is the amount of interest that is paid by the firm on the amount of loan taken from a partner. It is shown on the debit side of the Profit and Loss Account