Question

Tom and Harry were partners in a firm sharing profit in the ratio of 5:3 during the year ended 31st March 2015 Tom had withdraw rupees 40000 interest on drawing amounted to rupees 2000 pass necessary journal entry for charging interest on drawing assuming that the capital of the partners were fluctuating

Answer 1

Answer:

Tom's capital a/c dr. 2000

To interest on drawings. 2000

Explanation:

since, interest on drawings will reduce the capital claim , hence, it will be credited to Tom's capital a/c