Sumant and Rumant Contribute ₹ 8,00,000 and ₹ 4,00,000 respectively as capitals on which they agree to allow interest @ 6% p.a. They are to share profits in the ratio of 3 : 2. Net Profit for the year is ₹ 60,000.

Sumant and Rumant Contribute ₹ 8,00,000 and ₹ 4,00,000 respectively as capitals on which they agree to allow interest @ 6% p.a. They are to share profits in the ratio of 3 : 2. Net Profit for the year is ₹ 60,000.

Show the relevant account to allocate interest on capital:

(i) if Partnership Deep is silent about the treatment of interest on capital, and

(ii) if interest is a charge as per Partnership Deed.

Drawings during the year were ₹ 36,000 each and the net profit share of each partner was ₹ 30,000.