The deed says A will get interest on capital only if minimum capital is maintained. As capital is below the limit. What will happen?

Correct answer: Interest will not be allowed

The direct answer is option A: interest on capital will not be allowed, assuming the deed makes minimum capital maintenance a required condition. The reasoning is conditional. First, the deed promises interest only when the partner maintains at least the specified minimum capital. Second, A’s capital is below that minimum. Third, the condition has not been fulfilled, so the contractual entitlement to interest does not arise. Option A is correct on the facts given. Option B is wrong because the deed does not promise interest unconditionally or automatically for the whole year. Option C is wrong because failing a condition cannot create double interest. Option D concerns interest on drawings; it does not answer what happens to interest on capital and is a separate matter. In real accounting, the exact entry could depend on the precise wording of the deed, but the question clearly intends denial of interest. Memory cue: when a benefit has a stated condition, check the condition before calculating the benefit.