The entry in the partnership books of accounts for interest on drawings is to?
Question 1 Report
The entry in the partnership books of accounts for interest on drawings is to?
Answer Details
When a partner makes a drawing from the partnership, it is treated as a reduction of their share of the capital. If a partner takes an interest on their drawings, it means they are receiving additional payment on top of their share of the profits.
Therefore, the entry in the partnership books of accounts for interest on drawings is to debit the partner's capital account, and credit the drawings account. This is because the interest on drawings is considered an expense of the partnership, and it reduces the partner's capital balance.
So the answer is, debit the partner's capital account.
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