Question

Rajesh and Anu were partners in a firm sharing profits and losses in the ratio of 1 : 2. Their fixed capitals were ₹ 6,00,000 and ₹ 3,00,000 respectively. After the accounts for the year were prepared, it was noticed that interest on capital @ 12% p.a., as provided in the partnership deed, was not credited to the capital accounts of partners before distribution of profits. 

Pass the necessary adjusting journal entry. Show your workings clearly.

Answer 1

Journal Entry
Date	Particulars	L.F.	Amount Debit	Amount Credit
	Anu's Current A/c   ...Dr.		36,000	-
	To Rajesh's Current A/c		-	36,000
	(For rectification of interest on capital)

 

Particular	Rajesh		Anu		Firm
	Dr.	Cr.	Dr.	Cr.	Dr.	Cr.
Interest on Capital @ 12% p.a	–	72,000	–	36,000	1,08,000	–
Profits wrongly distributed	36,000	–	72,000	–	–	1,08,000
Net difference	36,000 (Cr.)	–	–	36,000 (Dr.)	–	–
	72,000	72,000	72,000	72,000	1,08,000	1,08,000