GST Practitioner & Accounts
15035 Points
Joined March 2014
You have pass entries in the books of accounts as per capital employed in the busniess fluctuating or fixed capital method .
J.E as per fluctuating capital method for Interest on capital
1) Interest on Partners capital A/c Dr
To partners Capital A/c Cr
( Being interest paid on capital to partners )
2) Profit & Loss Appropriation A/c A/c Dr
To Interest on partners capital A/c Cr
( Interest transfer to P&L Appo)
J.E for Interest on Drawings
1) Partners capital A/c Dr
partners Interest on Drawings A/c Cr
( Being interest earned on Drawings )
2) partners interest on Drawings A/c Dr
To Profit & Loss Appropriation A/c Cr
( Being interest income transfer to P&L Appo )
J.E for interest on capital in Fixed capital method
1) Interest on partners capital A/c Dr
To partners current Account A/c Cr
(being interest paid to partners )
2) Profit & Loss Appropriations A/c Dr
To Interest on partners capital A/c Cr
(Interest transfer to P&L Appo)
J.E for drawings iin fixed capital method
1) partners Current account A/c Dr
To Interest On partners Drawings A/c Cr
(Being interest earned on drawings )
2) Interest on partners Drawings A/c Dr
To Profit & Loss Appropriations A/c Cr
(Interest credited to P&L Appo )