Interest on partner loan is recorded in which account ??

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1359 Points Posted on 29 October 2021
interest on partner loan is recorded in which account profit and loss account or profit and loss appropriate account ??
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On 29 October 2021 at 23:52 Report
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This discussion explores the correct accounting treatment for interest paid on partner loans. Participants debate whether this interest should be recorded in the Profit and Loss account or the Profit and Loss Appropriation account. While some argue for the P&L account, others point to the ICAI module which suggests the P&L Appropriation account, drawing parallels with interest on capital.

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ca
603 Points Posted on 30 October 2021
Profit and loss ac
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On 30 October 2021 at 09:43
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1359 Points Posted on 30 October 2021
But in icai module it is recorded in profit and loss appropriation ac
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On 30 October 2021 at 10:27
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ca
603 Points Posted on 31 October 2021
Yes, there are two views to it. Interest on capital can be also be deemed as appropriation of profit as the same is classified as income from business in return of partners.
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On 31 October 2021 at 11:25

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