Question

Prakash and Supria were partners who share profits and losses in the ratio of 5 : 3. Balance in their capital account on 1^st April, 2018 was Prakash ₹ 3,00,000 and Supria ₹ 2,00,000. On 1^st July, 2018 Prakash introduced additional capital of ₹ 60,000. Supria introduced additional capital of ₹ 30,000 during the year. Calculate interest on capital at 6% p.a. for the year ending 31^st March, 2019 and show the journal entries.

Answer 1

Prakash			Supria
`3,00,000 xx 6/100`		18,000	`2,00,000 xx 6/100`	12,000
Additional capital: (on 1st July)			Supria's total Interest:
`60,000 xx 6/100 xx 9/12`		2700	`30,000 xx6/100 xx 6/12`	900
Total Prakash's Interest:		20,700	Supria's total Interest:	12,900

 

Journal Entries
Particulars	L.F.	Debit	Credit
Interest on capital A/c ..........Dr. To Prakash's Capital To Supria's Capital (Interest on capital entered)		33,600 - -	- 20,700 12,900