Question

Nusrat, Sonu and Himesh are partners sharing profits and losses in the ratio of 5 : 3 : 2. The partnership deed provides for charging interest on drawing’s @ 10% p.a. The drawings of Nusrat, Sonu and Himesh during the year ending December 2015 amounted to Rs. 20,000, Rs. 15,000 and Rs. 10,000 respectively. After the final accounts have been prepared, it was discovered that interest on drawings has not been taken into consideration. Give necessary adjusting journal entry.

Answer 1

Explanation:

1.  Nusrat Capital a/c                              dr     20000

   Sonu Capital a/c                                dr     15000

   Himesh Capital a/c                            dr     10000

                      To  Drawings a/c                                    45000

(Being withdrawals by partners)

2. Interest on Drawings a/c                   dr      1650

                      To  Nusrat Capital a/c                              dr     1000

                      To  Sonu Capital a/c                                dr     450

                      To  Himesh Capital a/c                            dr     200

(Being interest charged on drawings)