Question

A, B and C are partners in a firm. A retires on 1st April, 2012. On the date of retirement, Rs 80,000 is due to him in all. It is agreed to pay him this amount in instalments every year at the end of the year. Prepare A's Loan A/c in the following cases :

(i) Four yearly instalments plus interest @ 10% p.a.

(ii) Three instalments of Rs 25,000 which already include interest @ 10% p.a. on the outstanding balance and the balance including interest in the fourth year.

Books are closed on 31st March every year.

Answer 1

First Method :

$\begin{array}{cccccccccc}\text{Dr}& & & & & \text{A's LOAN A/C}& & & & \text{Cr}\end{array}$
$\begin{array}{cccccc}\text{Date}& \text{Particulars}& \text{Rs}& \text{Date}& \text{Particulars}& \text{Rs}\\ \text{2013}& & & 2012& & \\ \text{March 31}& \text{Bank A/c}& 28,000& \text{April 1}& \text{A's Capital A/c}& 80,000\\ & (20,000+8,000)& & 2013& & \\ \text{March 31}& \text{Balance c/d}& 60,000& \text{March 31}& \text{Interest on Rs 80,000}& \\ & & & & @10\%& 8,000\\ & & \overline{\underset{–}{\underset{–}{88,000}}}& & & \overline{\underset{–}{\underset{–}{88,000}}}\\ 2014& & & 2013& & \\ \text{March 31}& \text{Bank A/c}& 26,000& \text{April 1}& \text{Balance b/d}& 60,000\\ & (20,000+6,000)& & 2014& & \\ \text{March 31}& \text{Balance c/d}& 40,000& \text{March 31}& \text{Interest on Rs 60,000}& \\ & & & & @10\%& 6,000\\ & & \overline{\underset{–}{\underset{–}{66,000}}}& & & \overline{\underset{–}{\underset{–}{66,000}}}\\ 2015& & & 2014& & \\ \text{March 31}& \text{Bank A/c}& 24,000& \text{April 1}& \text{Balance b/d}& 40,000\\ & (20,000+4,000)& & 2015& & \\ \text{March 31}& \text{Balance c/d}& 20,000& \text{March 31}& \text{Interest on Rs 40,000}& \\ & & & & @10\%& 4,000\\ & & \overline{\underset{–}{\underset{–}{44,000}}}& & & \overline{\underset{–}{\underset{–}{44,000}}}\\ 2016& & & 2015& & \\ \text{March 31}& \text{Bank A/c}& 22,000& \text{April 1}& \text{Balance b/d}& 20,000\\ & (20,000+2,000)& & 2016& & \\ & & & \text{March 31}& \text{Interest on Rs 20,000}& \\ & & & & @10\%& 2,000\\ & & \overline{\underset{–}{\underset{–}{22,000}}}& & & \overline{\underset{–}{\underset{–}{22,000}}}\end{array}$

Second Method :

$\begin{array}{cccccccccc}\text{Dr}& & & & & \text{A's LOAN A/C}& & & & \text{Cr}\end{array}$

$\begin{array}{cccccc}\text{Date}& \text{Particulars}& \text{Rs}& \text{Date}& \text{Particulars}& \text{Rs}\\ \text{2013}& & & 2012& & \\ \text{March 31}& \text{Bank A/c}& 25,000& \text{April 1}& \text{A's Capital A/c}& 80,000\\ \text{March 31}& \text{Balance c/d}& 63,000& \text{2013}& & \\ & & & \text{March 31}& \text{Interest on Rs 80,000}& 8,000\\ & & \overline{\underset{–}{\underset{–}{88,000}}}& & @10\%& \overline{\underset{–}{\underset{–}{88,000}}}\\ 2014& & & 2013& & \\ \text{March 31}& \text{Bank A/c}& 25,000& \text{April 1}& \text{Balance b/d}& 63,000\\ \text{March 31}& \text{Balance c/d}& 44,300& 2014& & \\ & & & \text{March 31}& \text{Interest on Rs 63,000}& \\ & & & & @10\%& 6,300\\ & & \overline{\underset{–}{\underset{–}{69,300}}}& & & \overline{\underset{–}{\underset{–}{69,300}}}\\ \text{2015}& & & 2014& & \\ \text{March 31}& \text{Bank A/c}& 25,000& \text{April 1}& \text{Balance b/d}& 44,300\\ \text{March 31}& \text{Balance c/d}& 23,700& \text{2015}& & \\ & & & \text{March 31}& \text{Interest on Rs 44,300}& 4,430\\ & & \overline{\underset{–}{\underset{–}{48,730}}}& & @10\%& \overline{\underset{–}{\underset{–}{48,730}}}\\ \text{2016}& & & 2015& & \\ \text{March 31}& \text{Bank A/c}& 26,070& \text{April 1}& \text{Balance b/d}& 23,700\\ & & & \text{2016}& & \\ & & & \text{March 31}& \text{Interest on Rs 23,700}& 2,370\\ & & \overline{\underset{–}{\underset{–}{26,070}}}& & @10\%& \overline{\underset{–}{\underset{–}{26,070}}}\end{array}$