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A partner’s Loan Account has an opening credit balance of ₹2,25,000. Interest of ₹13,500 is credited to the account, and ₹70,000 is paid. What will be the final credit balance of the Loan Account?

Answer and explanation

Correct answer: ₹1,68,500

Final credit balance = Opening credit balance + Interest credited − Payment = ₹2,25,000 + ₹13,500 − ₹70,000 = ₹1,68,500. Crediting interest increases the Loan Account balance, while payment reduces it through a debit. Option C ignores the payment. Exam tip: In a partner’s Loan Account, add credit entries and subtract debit entries to find the closing balance.

Related tags

Partners-Loan-AccountRetirement-Of-PartnerCredit-BalanceInterest-And-PaymentAccounting-CalculationsPartner's Loan AccountPartner S Loan AccountReconstitution Retirement Or Death Of A Partner

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