Accountancy Part AAccounting for Partnership

A and B are partners without any partnership deed. B has given loan o…

A and B are partners without any partnership deed. B has given loan of ₹2,00,000 to the firm on 1st July 2023. B claim interest on loan @10% p.a. How much interest on loan will be paid to B for the year ending on 31st March 2024?

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → Rs. 9,000

With no partnership deed, the Indian Partnership Act applies: a partner who lends money to the firm gets interest on the loan at 6% per annum, whatever rate he claims. Interest runs from the date of the loan to the end of the year.

Loan = Rs. 2,00,000
Period = July 1, 2023 to March 31, 2024 = 9 months
Interest = Rs. 2,00,000 × 6/100 × 9/12
= Rs. 9,000

NCERT (2026-27 edition):
Test your Understanding – II

Extract from the NCERT textbook

NCERT (2026-27 edition):
Provisions of Partnership Act Relevant for Accounting – “… (d) Interest on Loan: If any partner has advanced loan to the firm for the purpose of business, he/she shall be entitled to get an interest on the loan amount at the rate of 6 per cent per annum.”