Junior Class 1 Answered
Hi Shrishti,
In context of the above query we will state that rent that is paid to a partner is always treated as a charge against profits and not an appropriation. Therefore, the figure of Rs 60,000 (i.e. payment of Rs 5,000 p.m.) would be debited to P&L Account. Accordingly, we will start our P&L Appropriation Account with 69,000 (i.e. 9,000 + 60,000) as figure of loss for the year ending March 31, 2017.
For the loans granted by Bat and Ball, interest would be paid at 6% p.a. as per the Partnership Act, 1932.
Hope this clarifies this doubt !!!
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