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interest on partners loan
what will be Accounting treatment of interest on loan given by a partner to firm
Replies (4)
It is a charge against profits. It is provided irrespective of profits or loss. It will also be provided in the absence of Partnership Deed @ 6% per annum.
The journal entry would be :
P&L ... Dr
To, partner's loan A/C
Accordingly, make the ledger entries
But in module interest was shown p&l appropriation a/c
Also in book of Hanif Mukherjee
According to partnership act any payment made to partner except rent must be shown in P&L App a/c
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