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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Ram, Mohan and Sohan, sharing profits and losses equally, have capitals of ₹1,20,000, ₹90,000 and ₹60,000 respectively. For the year ended 31st March, 2024, interest was credited to them @ 6% instead of 5%. Give the adjustment Journal entry.
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Ram’s Capital A/c Dr. | 300 | |||
| To Sohan’s Capital A/c | 300 | |||
| (Excess interest on capital wrongly credited, now adjusted) |
Statement Showing Adjustment
| Particulars | Ram | Mohan | Sohan | Total |
|---|---|---|---|---|
| Interest wrongly credited @ 6% (reversed) | (7,200) | (5,400) | (3,600) | (16,200) |
| Interest to be credited @ 5% | 6,000 | 4,500 | 3,000 | 13,500 |
| Excess ₹2,700 redistributed as profit (1 : 1 : 1) | 900 | 900 | 900 | 2,700 |
| Net Effect | –300 (Dr.) | Nil | +300 (Cr.) | Nil |
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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