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Azad and Benny are equal partners. Their capitals are ₹ 40,000 and ₹ 80,000 respectively. After the accounts for the year had been prepared, it was noticed that interest @ 5% p.a. as provided in the Partnership Deed was not credited to their Capital Accounts before the distribution of profits. It is decided to pass an adjustment entry at the beginning of the next year. Record the necessary Journal entry.

[Ans: Debit Azad by ₹ 1,000 and Credit Benny by ₹ 1,000]

Anurag Pathak Changed status to publish April 11, 2023