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Which is the correct entry for adding interest on retiring partner loan?

Answer and explanation

Correct answer: Interest on loan debit and retiring partner loan credit

Interest is an expense for the firm and increases amount payable to the partner. Hence interest account is debited and loan account is credited.

Related tags

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

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