Question 19 Chapter 2 of +2 Part-1 - USHA Publication 12 Class Part - 1

Question 19 Chapter 2 of +2-Part-1

19. (Interest on Capital/Journal Entry) C and D have capital of Rs.70,000 and Rs.90,000 on 1st April 2014. C made an addition of Rs.40,000 to his capital on 1st October 2014. Interest on capital is allowed @ 10% p.a. Pass journal entry for the interest on capital for the year ended 31st March 2015.

The solution of Question 19 Chapter 2 of +2 Part-1: -

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Particulars		Details	Amount
	C’s Capital:
	On 70,000 @10% for 1 year		7,000
	On 40,000 @10% for 1/2 year		2,000	9,000
D’s Capital:
On 90,000 @10% for 1 year			9,000

 

Journal

Date	Particulars		L.F.	Debit	Credit
	Interest on Capital A/c	Dr.		18,000
	To C’s Capital A/c				9,000
	To D’s Capital A/c				9,000
	(Being interest on Capital allowed)

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