Aru and Esha are partners sharing profits equally. Esha had given loan of ₹ 4,00,000 to the firm on 1st October 2023 and it was agreed that interest will be paid @ 9% p.a

Aru and Esha are partners sharing profits equally. Esha had given loan of ₹ 4,00,000 to the firm on 1st October 2023 and it was agreed that interest will be paid @ 9% p.a. Interest on Esha’s Loan up to February 2024 was paid by cheque on 2nd March 2024 and balance was yet to be paid.

Pass Journal entries for interest on loan for the year ended 31st March, 2024.

[Ans. Interest paid on Loan by Esha up to February 2024 ₹ 15,000; Interest transferred to Profit & Loss A/c ₹ 18,000.]