Question

intrest on capital charges joural entry​

Answer 1

Explanation:

Accounting and Journal Entry for Interest on Capital

Interest on Capital A/cDebitDebit the increase in expenseTo Capital A/cCreditCredit the increase in capital

Answer 2

Answer:

Accounting and Journal Entry for Interest on Capital

Accounting and Journal Entry for Interest on CapitalInterest on Capital A/c Debit Debit the increase in expense

Accounting and Journal Entry for Interest on CapitalInterest on Capital A/c Debit Debit the increase in expenseTo Capital A/c Credit Credit the increase in capital

Explanation:

Interest on capital is an expense to the firm and is debited to the profit and loss appropriation account. Interest is payable to the partners and hence, the partner's capital account is credited with the amount of interest.

Interest on Capital has the following two effects on final accounts: It is an expense of the business, therefore; it will be recorded on the debit side of Profit and Loss Account. On the other hand, it is an income of the owner, therefore; it will be added in the Capital Account in Balance Sheet

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