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Question
Raja, Roopa, and Mala, sharing profits and losses equally, have fixed capitals of ₹ 12,00,000, ₹ 9,00,000, and ₹ 6,00,000, respectively. For the year ended 31st March, 2022, interest was credited to them @ 6% instead of 5% p.a. Give the adjusting entry.
Journal Entry
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Solution
| Table Showing Adjustment | ||||
| Particulars | Raja | Roopa | Mala | Total |
| Interest wrongly created @ 6% p.a. (Dr.) | 72,000 | 54,000 | 36,000 | 1,62,000 |
| Interest created @ 5% p.a. provided (Cr.) | 60,000 | 45,000 | 30,000 | 1,35,000 |
| 12,000 | 9,000 | 6,000 | 27,000 | |
| Profit Created in 1 : 1 : 1 | 9,000 | 9,000 | 9,000 | 27,000 |
| 3,000 (Dr.) | 3,000 (Cr.) | |||
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) |
| Raja’s Current A/c ...Dr. | 3,000 | - | ||
| To Mala’s Current A/c | - | 3,000 | ||
| (Being interest on capital wrongly created, now adjusted.) |
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