Question

Mani is a partner, who withdrew ₹ 30,000 on 1^st September, 2018. Interest on drawings is charged at 6% per annum. Calculate interest on drawings on 31^st December, 2018 and show the journal entries by assuming that fluctuating capital method is followed.

Answer 1

Interest on drawings = `"Amount withdrawn" xx "Rate"/100 xx "Period of interest"`

= `30,000 xx 6/100 xx 4/12`

Interest on drawings = ₹ 600

Journal Entries
Date	Particulars	L.F.	Debit	Credit
31.12.2018	Mani's capital A/c  ...Dr.		600	-
	To Interest on Drawings A/c		-	600
	(Interest on drawings charged)
31.12.2018	Interest on Drawings A/c  ...Dr.		600	-
	To Profit and Loss Appropriation A/c		-	600
	(Interest on drawings A/c closed)