On which side is interest recorded in retiring partner loan account?

Correct answer: जमा पक्ष

The governing rule for a liability account is that an increase in the amount payable is credited. Interest on a retiring partner’s loan is an expense for the firm, but it also increases the firm’s obligation to the retired partner. In the retiring partner’s Loan Account, the opening unpaid balance is credited and interest due is also credited, because both amounts are payable to the lender. Thus, option A, the credit side, is correct. The debit side generally records payments made to the partner, which reduce the outstanding liability. Recording interest on both sides would have no normal accounting basis, and leaving it unrecorded would understate the amount owed.