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What account ...

Question

What account is credited for recording interest on capital in the books of the firm?

A

Interest on Capital A/c

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B

Partner's Capital A/c

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C

Profit and Loss A/c

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D

Bank A/c

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Solution

The correct option is B
Partner's Capital A/c

The journal entry is going to be:

Interest on Capital A/c Dr
To Partner's Capital A/c

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