Question

P and Q are partners with profit sharing ratio of 2 : 3 with fixed capitals of ₹ 5,00,000 and ₹ 8,00,000 respectively. On 1st June 2023, P and Q granted loans of ₹ 2,00,000 and ₹ 1,00,000 respectively to the firm. Books of the firm are closed on 31st March 2024.

You are required to answer the following question:

Interest on Loan by P will be ______.

Options

• Credited to P's Capital Account

• Credited to P's Current Account

• Credited to P's Loan Account

• Debited to P's Loan Account

Answer 1

Interest on Loan by P will be credited to P's Loan Account.