Interest on drawings was RO. 270 for Saud, RO.180 for Salim and RO. 90 for Sulaimon. The accounting entry for charging interest on drawings to each partners will be: a. Dr: Saud's capital account RO 135 Dr: Salim's capital account RO 90 Dr: Sulaimon's capital account RO 45 Cr: Interest on drawings account RO 270 b. Dr: Saud's capital account RO 270 Dr: Salim's capital account RO 180 Dr: Sulaimon's capital account RO 90 Cr: Interest on drawings account RO 540 c. Dr; Interest on drawing account RO 270 Cr: Saud's capital account RO 135 Cr: Salim's capital account RO 90 Cr: Sulaimon's capital account RO 45 d. Dr: Saud's capital account RO 270 Dr: Salim's capital account RO 180 Dr: Sulaimon's capital account RO 90 Cr: Profit and loss account RO 540
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Interest on drawings was RO. 270 for Saud, RO.180 for Salim and RO. 90 for Sulaimon.
The accounting entry for charging interest on drawings to each partners will be:
Dr: Saud's capital account RO 135
Dr: Salim's capital account RO 90
Dr: Sulaimon's capital account RO 45
Cr: Interest on drawings account RO 270
Dr: Saud's capital account RO 270
Dr: Salim's capital account RO 180
Dr: Sulaimon's capital account RO 90
Cr: Interest on drawings account RO 540
Dr; Interest on drawing account RO 270
Cr: Saud's capital account RO 135
Cr: Salim's capital account RO 90
Cr: Sulaimon's capital account RO 45
Dr: Saud's capital account RO 270
Dr: Salim's capital account RO 180
Dr: Sulaimon's capital account RO 90
Cr:
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