Account Quary . HELP???

Rahul

B.Com LL.B ICWA(Finalist)

62 Points Posted on 15 May 2010

By loan is better..........

kavita aggarwal

.

135 Points Posted on 15 May 2010

the loan of the incoming partner should b converted into his capital i guess..

Guest

Fully agreed with Kavita

Regards,

Rahul Sharma

Utsav

student

64 Points Posted on 15 May 2010

Thanks 2 all

Nitin Singhal

Gaining knowledge...

320 Points Posted on 15 May 2010

Hello Utsav ji,

If C has additional funds it would be better to bring that funds to partnership business. Since it will add value to business. Otherwise generally loan is converted into capital . The entry is:

C's Loan A/c Dr.

To C's Capital A/c

PRADEEP REDDY

CHARTERED ACCOUNTANT

664 Points Posted on 15 May 2010

i agree with nitin singhal

Dear Friends If their is any int which is not paid till now or int which will be paid on due date can than also u can pay it in cash or also convert it in capital with loan with the above said entry by nitin and Int will also be debited in P n L A/c because it exp till the joining of C as Partner. Regards

Sudev Namboothiri

CA FINAL

432 Points Posted on 15 May 2010

agree with nithin...

ravinder

Accountant

21 Points Posted on 16 May 2010

accounts

Bhavik Davda

Proprietor

238 Points Posted on 16 May 2010

Two aspects of the matter( very general and known to all of us)

If the loan has been coverted in to the capital- in future it may get affixed in the partnership act rules for ( interest rate is more than 12%)- Further when the perfomance of the firm is not good or even a loss- a loss of interest may take place to the partner having loan. It is better to convert the loan in to capital if the firm is not in need of more money and can sacrifice the existing profits. Depends upon the case-