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The retiring partner’s loan account has an outstanding balance of ₹2,50,000. After adding 5% interest, a payment of ₹60,000 is made. What amount will remain in the loan account?

Answer and explanation

Correct answer: ₹2,02,500

Interest = ₹2,50,000 × 5/100 = ₹12,500. Therefore, the total amount payable before the payment is ₹2,62,500. After deducting the payment of ₹60,000, the remaining loan is ₹2,62,500 − ₹60,000 = ₹2,02,500. Hence, option A is correct. Exam tip: add the interest to the loan balance first and then subtract the amount paid.

Related tags

Partners LoanRetirement Of PartnerInterest CalculationLoan RepaymentAccounting AdjustmentPartner's Loan AccountPartner S Loan AccountReconstitution Retirement Or Death Of A Partner

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