Question

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Allow interest on capital of 5,00,000 @6% . Jornalise it

Answer 1

Answer:

interest on capital ... Dr

to cash

Explanation:

Accounting and Journal Entry for Interest on Capital

Interest on capital is an expense for the business and is added to the capital of the proprietor thereby increasing his total capital in the business. It is not paid in cash or by the bank.

Answer 2

Answer:

Explanation:

capital a/c  dr.   5,00,000

interest a/c dr.        30,000

    to cash a/c                        5,30,000