Question

Kamal and Kapil are partners having fixed Capitals of 5 lakh each as on 31st March 2016 Kamal introduced further capital of 100000 on 1st October 2016 whereas kapil withdraw 100000 on 1st October 2016 out of capital interest on capital is to be allowed @ 10% per anum .the firm earned net profit of 6 lakh for the year ended 31st March 2017 pass the journal entry for interest on capital and prepare Profit and Loss appropriation account

Answer 1

Journal Entries:
Interest on capital a/c dr   55000
                     to kamal's capital a/c 55000

Interest on capital a/c dr   45000
                     to kapil's captial a/c   45000

Answer 2

Explanation:

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