interest on partners loan
sharad priyanshi (5 Points)
26 July 2018
what will be Accounting treatment of interest on loan given by a partner to firm
4 Replies
CA Sunil Kumar
(Chartered Accountant)
(4524 Points)
Replied 26 July 2018
It is a charge against profits. It is provided irrespective of profits or loss. It will also be provided in the absence of Partnership Deed @ 6% per annum.
Pranjali
(intern)
(2216 Points)
Replied 26 July 2018
The journal entry would be :
P&L ... Dr
To, partner's loan A/C
Accordingly, make the ledger entries
sharad priyanshi
(5 Points)
Replied 26 July 2018
But in module interest was shown p&l appropriation a/c
Also in book of Hanif Mukherjee
sharad priyanshi
(5 Points)
Replied 26 July 2018
According to partnership act any payment made to partner except rent must be shown in P&L App a/c
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