If interest is to be charged on a partners debit capital balance on which side will this interest be recorded?

Correct answer: Debit in partners account

A debit capital balance means that the partner owes an amount to the firm or has a negative balance in the capital account. If the deed or applicable agreement requires interest to be charged on this debit balance, the charge is treated as an amount recoverable from the partner. A charge against a partner increases the debit in that partner’s account. This is the opposite of interest allowed on a credit capital balance.

Hence, the correct choice is A: debit the partner’s account. The entry records the interest as a charge to the partner, while the corresponding credit is made to the appropriate interest or firm account according to the accounting system used. It is not an item in the stock account, because the charge does not relate to goods. A loan account is also not the correct account merely because interest is involved. The supplied answer is consistent.