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If firm does not pay interest on retiring partner loan but interest is due what will happen?

Answer and explanation

Correct answer: Interest will be credited to loan account and increase amount due

Unpaid interest remains payable to the partner. Therefore it is credited to loan account and increases liability.

Related tags

Partners-LoanAccrued-InterestLiabilityPartner's Loan AccountPartner S Loan AccountReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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