# Question 16 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 16 Chapter 2 of +2-A

16. Amar and Bimal entered into a partnership on 1st April 2018 contributing ₹ 1,50,000 and ₹ 2,50,000 respectively towards the capital. The Partnership Deed provided for interest on capital @ 10% p.a. It also provided that Capital Accounts shall be maintained following Fixed Capital Accounts method. The firm earned a net profit of ₹ 1,00,000 for the year ended 31st March 2019.
Pass the Journal entry for interest on capital.

The solution of Question 16

Chapter 2 of +2-A

 Date Particulars L.F. Debit Credit April 1 Profit and Loss Appropriation A/c Dr 40,000 To Amar’s Capital A/c 15,000 To Bimal’s Capital A/c 25,000 (Being interest on capital credited to partners capital account)

Working Note: –

*1: -Calculation of Total Interest on Amar’s Capital, and Bimal’s Capital
Interest on Capital = Capital X Rate of Interest X Period
Amar’s Capital = 1,50,000
Rate of Interest = 10%
Period = Whole year(So we don’t need to add period in the formula)
= 1,50,000 X 10/100
Total Interest on Amar’s Capital = 15,000/-

Bimal’s Capital = 2,50,000
Rate of Interest = 10%
Period = Whole year(So we don’t need to add period in the formula)
= 2,50,000 X 10/100
Total Interest on Bimal’s Capital = 25,000/-

Comment if you have any questions.

Also, Check out the solved question of previous Chapters: –

### T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

• Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
• Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
• Chapter No. 3 – Goodwill: Nature and Valuation
• Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
• Chapter No. 5 – Admission of a Partner
• Chapter No. 6 – Retirement/Death of a Partner
• Chapter No. 7 – Dissolution of a Partnership Firm

### T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 1 – Financial Statements of a Company
• Chapter No. 2 – Financial Statement Analysis
• Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
• Chapter No. 4 – Accounting Ratios
• Chapter No. 5 – Cash Flow Statement