Please answer 3rd question
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If the partnership deed provides for the payment of interest on capital,then it should be paid to the partners in case of profits.
P and Q are entitled to interest on their capital contribution @ 12% per annum.
The adjustment entry should be:-
Profit and Loss Appropriation A/c Dr 72,000
To P's Current A/c 36,000
To Q's Current A/c , 36,000
(Being the interest on capital paid to P and Q @12%p.a)
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