Journal Entry for Interest on Capital

The proprietor can charge interest on the amount invested by him/her in the business as capital, which is shown as Interest on Capital.

Journal Entry:

Example 1: Interest is charged ₹800 on capital.

Solution:

Example 2:

Started business with Cash ₹1,00,000.

Charged Interest on Capital @6% per annum.

Solution:

Article Tags :

Accountancy

Commerce

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