Question

Jai and Partap are partners sharing profits in the ratio of 3 : 2. Their Capitals are ₹ 4,00,000 and ₹ 2,00,000 respectively. Firm earned a profit of ₹ 97,000 for the year ended 31st March, 2024, before providing for any of the following adjustments: Interest on Capital is to be allowed @ 8% p.a. Interest is to be provided on Loan of ₹ 1,00,000 taken from Partap on 1st June 2023 and again ₹ 50,000 taken on 1st August, 2023. Jai is entitled to a rent of ₹ 5,000 per month for using his property for business purposes. Rent is still payable at the end of the year.

Based on the above information you are required to answer the following question:

Rent payable to Jai will be ______.

Options

• Debited to Profit & Loss Account

• Debited to Profit & Loss Appropriation Account

• Credited to Jai's Capital Account

• Credited to Rent Payable Account

Answer 1

Rent payable to Jai will be debited to Profit & Loss Account and credited to Rent Payable Account.