Rent payable to partner is....

The correct answer is Option (3) → Debited to profit and loss account

Rent paid to a partner for letting the firm use his or her building is a business expense, just as rent paid to an outsider would be. An expense is a charge against profit: it is debited to the Profit and Loss Account before the net profit is worked out. Only after that is the net profit appropriated among the partners.

Option (1) Debited to trading account — Incorrect. The trading account takes direct expenses of buying and making goods; rent of a building used by the firm is an indirect expense for the Profit and Loss Account.

Option (2) Credited to profit and loss account — Incorrect. Rent payable is an expense of the firm, so it is debited, not credited.

Option (4) Debited to profit and loss appropriation account — Incorrect. The appropriation account takes the partners’ salary, commission and interest on capital, which are shares of profit. Rent is owed whether or not there is a profit, so it is a charge, not an appropriation.