Give the adjusting entry and closing entry for interest on loan taken by a partner from the firm, when the firm follows the Fluctuating Capital Method.
Give the adjusting entry and closing entry for interest on a loan taken by a partner from the firm, when the firm follows the Fluctuating Capital Method.
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Answer:-
a) Adjusting Entry:
Concerned Partner’s Capital A/c  …Dr.
To Interest on Loan A/c
( Being the interest due on loan to partner)
b) Closing Entry:
Interest on Loan A/c …Dr.
To Profit and Loss A/c
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