Assertion(A): Rahul a partner in the firm gave loan of Rs. 5,00,000 to the firm without an agreement as to rate of interest. Interest on Loan by Rahul is to be allowed @6%pa.
Reason(R): In the absence of partnership deed, provision of the act 1932 apply. Thus interest on Loan to Partner should be charged at 6%p.a.
Reason(R): In the absence of partnership deed, provision of the act 1932 apply. Thus interest on Loan to Partner should be charged at 6%p.a.
Answer & explanation
Correct answer: option 1
Both assertion and reason are true and reason is the correct explanation of the assertion. Partners are paid interest on loan of partner @6% p.a if partnership deed does not have provision against it. In this case provisions of the partnership act 1932 are applied.