If interest on capital is allowed but the firm's profit is insufficient, what is generally done?

Correct answer: Allowed proportionately up to the available profit

The governing concept is that interest on capital is an appropriation of profit, not an ordinary business expense. When the available profit is insufficient, the total interest normally admissible is restricted to that available profit and is distributed among partners proportionately to their interest claims. Thus option A is correct. It is not automatically paid in full during a loss, nor is it sales or drawings.