Accounting – 5.2 Partnerships | e-Consult
5.2 Partnerships (1 questions)
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Interest Received by Mary (Ledger Account):
| Interest Received | |||
| Date | Particulars | Debit | Credit |
| 1st Jan 2023 | Capital (John) | £20,000 | |
| 31st Dec 2023 | Interest Received (John) | £1,000 (5% of £20,000) |
Interest Paid by John (Ledger Account):
| Interest Paid | |||
| Date | Particulars | Debit | Credit |
| 31st Dec 2023 | Drawings (John) | £5,000 |
Explanation:
- Interest Received by Mary: Interest is calculated on John's capital investment (£20,000) at 5% per annum. This is £1,000. The credit side of Mary's interest account reflects this receipt.
- Interest Paid by John: Interest is calculated on John's drawings (£5,000) at 5% per annum. This is £250. The debit side of John's interest account reflects this payment.