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Allowed intrest on capital rupess 700 in which it added

Answer»

Interest on capitalInterest on capitalThe JOURNAL ENTRY is as follows:Interest on capitalThe journal entry is as follows: Interest on capital a/c_____drInterest on capitalThe journal entry is as follows: Interest on capital a/c_____dr To capital a/cExplanation:Interest on capital is an expenditure for business as interest is to be paid to owner and is nominal a/c so debitedInterest on capital is an expenditure for business as interest is to be paid to owner and is nominal a/c so debitedCapital is liability of business towards owner and is increased DUE to interest PAYMENT so credited.



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