Income or Expense?

Debit interest expense..

 Interest on drawings is income to the  business and  expense (loss) to proprietor will be debited to Capital account.. 


 

Same  thing  in case of  Partnership Firm  , partners withdraw Goods or money ( Drawings )  from the  Business , so as per  partnership  deed   Business charge  Interest   on Drawing  to  partners  , therefore  Interest  on Drawings  is Income  to the  partnership  Firm (Business )   and  expense  (loss ) to the  partners . 

You are welcome.           

Ok so partnership accounting has the henious form and legality. Why didn't they come into business combinations? Very funny!