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Anita and Ankita are partners sharing profits equally. Their capitals, maintained following Fluctuating Capital Accounts Method, as on 31st March, 2018 were ₹ 5,00,000 and ₹ 4,00,000 respectively. Partnership Deed provided to allow interest on capital 10% p.a. The firm earned net profit of ₹ 2,00,000 for the year ended 31st March, 2019.Pass the Journal entry for interest on capital.

Answer» Anita and Ankita are partners sharing profits equally. Their capitals, maintained following Fluctuating Capital Accounts Method, as on 31st March, 2018 were ₹ 5,00,000 and ₹ 4,00,000 respectively. Partnership Deed provided to allow interest on capital 10% p.a. The firm earned net profit of ₹ 2,00,000 for the year ended 31st March, 2019.

Pass the Journal entry for interest on capital.


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