Question

Partner A granted loan of ₹ 40,000 to the firm in the beginning of the year.

Interest on loan is @ 10% per annum. Pass the necessary journal entries, with

respect to interest on partner’s loan, in the books of firm.​

Answer 1

Answer:

interest on A's loan = 40,000×10/100 = 4000

interest on A's loan AC.... Dr 4000

to A's loan AC... 4000

profit and loss AC.... Dr. 4000

to interest on A's loan 4000