A, B and C were partners in a firm sharing profits and losses equally. Their respective capitals were ₹10,00,000, ₹9,00,000 and ₹8,00,000.
The partnership deed provided for the following:
(1) Interest on capital @ 9% per annum.
(2) Interest on drawings @ 12% per annum.
(3) Interest on partner’s loan to the firm @ 10% per annum.
During the year, B had withdrawn ₹20,000 for his personal use. On 30.9.2021, A had given a loan of ₹70,000 to the firm.
Pass the necessary journal entries in the books of the firm for the following for the year ended 31st March, 2022:
(i) Allowing interest on C’s capital
(ii) Providing interest on A’s Loan
(iii) Charging interest on B’s Drawings
Also give transfer entries in the Profit and Loss Account/Profit and Loss Appropriation Account, as the case may be.