Question

If the interest on capital is omitted, what will be the journal entry during the situation?

Options

• Profit & Loss Adjustment A/c    Dr.
      To Partners' Capital/Current A/cs
  (Being adjustment made for interest on capital previously omitted, now carried out)

• Profit & Loss A/c     Dr.
      To Partners' Capital/Current A/cs
  (Being adjustment made for interest on capital previously omitted, now carried out)

• Partners' Capital/Current A/cs    Dr.
      To Profit and Loss Appropriation A/c
  (Being adjustment made for interest on capital previously omitted, now carried out)

• Profit and Loss Appropriations A/c     Dr.
         To Profit and Loss A/c
  (Being adjustment made for interest on capital previously omitted, now carried out)

Answer 1

Profit & Loss Adjustment A/c    Dr.
     To Partners' Capital/Current A/cs
(Being adjustment made for interest on capital previously omitted, now carried out)