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Byju's Answer
Standard XII
Accountancy
Interest on Debentures
Interest is p...
Question
Interest is payable even if there are no profits.
A
True
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B
False
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Q.
X and Y contribute ₹ 20,000 and ₹ 10,000 respectively towards capital. They decide to allow interest on capital @ 6% p.a. Their respective share of profits is 2 : 3 and the net profit for the year is ₹ 1,500. Show distribution of profits:
(i) where there is no agreement except for interest on capitals; and
(ii) where there is an agreement that the interest on capital as a charge.
