(i) Credit side of partner's current account.
(ii) Debit side of partner's capital account
(iii) Credit of partner's capital account
(iv) Debit side of partner's current account
(v) Credit side of partner's current account

No, the accountant is not correct. He has not recorded the interest on loan currently because the interest on loan is a charge against profits and not an appropriation of profits.

It is so because salary or commission paid to a partner is not a charge on profit but an I appropriation of profit.

If the drawings are made regularly on the first day of each month, the interest on drawings will be
calculated for 6\(\frac12\) months i.e
Interest on drawings = Total drawings x \(\frac{Rate}{100}\) x \(\frac{6.5}{12}\)

Interest on partner's capital and interest on drawings are an appropriation of profit and not a charge on profit and hence is recorded through profit and loss appropriation account instead of profit and loss account

According to Indian partnership Act, 1932, no salary is allowed to partners in the absence of partnership deed so the claim of A for salary of Rs.18,000 per month is not valid.

According to Indian partnership Act, 1932 in the absence of partnership deed, profits are shared equally among the partners. So, the claim of Ramesh to share the profits in the ratio of capitals is not valid.

(a) Under fixed capital method, salary payable to a partner is recorded in the current account
(b) Under fixed capital method, drawings made by a partner is recorded in the current account.

In the current account, the transactions relating to drawings, interest on capital, interest on drawings, salary, share of profit or loss etc, are recorded. Hence, the balance in the currents accounts change every year.

(i) Drawings is the amount withdrawn in each or in kind, for personal purposes.
(ii) A drawings account is opened in the name of each partner and the drawings are debited to this account.
(iii) At the end of every year, the drawings account is closely by a transfer to the respective partner's capital account or current account

Calculation of interest on drawings of Ram (using average period)
Total amount of drawings = 18,000 \(\times\) 2 = Rs. 36,000
If drawings are made at the end of every half year, average period = 9
Interest on drawings = Total amount of drawings \(\times\) Rate of interest \(\times\) \(\frac{Average \ period}{12}\)
= Rs. 36000 \(\times\) \(\frac{10}{100}\times\frac{9}{12}\)
= Rs. 2,700

Calculation of interest on capital:
Interest on capital = Amount of capital \(\times\) Rate of interest
Interest on Mannan's capital = 1,50,000 \(\times\) \(\frac{6}{100}\) = Rs. 9,000
Interest on Ramesh's capital = 1,00,000 \(\times\) \(\frac{6}{100}\) = Rs. 6,000

Journal entries

Date	Particulars	L.F	Debit Rs.	Credit Rs.
2019 March 31	Interest on capital A/c                 Dr   To Mannan's current A/c   To Ramesh's current A/c (Interest on capital provided)		15,000	9,000 6,000
2019 March 31	Profit and loss appropriation A/c Dr   To Interest on capital A/c (Interest on capital closed)		15,000	15,000

Partnership deed is a document in writing that contains the terms of the agreement among the partners. It is not compulsory for a partnership to have a partnership deed as per the Indian Partnership Act, 1932. But, it is desirable to have a partnership deed as it serve as an evidence of the terms of the agreement among the partners.

Calculation of interest on capital:
Interest on capital = Amount of capital \(\times\) Rate of interest
Interest on Mannan’s capital = 80,000 \(\times\) 5/100 = Rs. 4,000
Interest on Ramesh’s capital = 60,000 \(\times\) 5/100 = Rs. 3,000
Note: Balance of current account will not be considered for calculation of interest on capital.

Date	Particulars		L.F.	Debit Rs.	Credit Rs.
2018	Interest on capital A/c	Dr.		7,000
March 31	To Mannan’s current A/c				4,000
	To Ramesh’s current A/c (Interest on capital provided)				3,000
"	Profit and loss appropriation A/c	Dr.		7,000
	To Interest on capital A/c (Interest on capital closed)				7,000

Interest on drawings = Amount of drawings x Rate of interest x Period of interest

Withdrawal on February 1	= Rs. 2,000 x \(\frac{6}{100}\) x \(\frac{11}{12}\)	= Rs. 110
Withdrawal on May 1	= Rs.10,000 x \(\frac{6}{100}\) x \(\frac{8}{12}\)	= Rs. 400
Withdrawal on July 1	= Rs. 400 x \(\frac{6}{100}\) x \(\frac{6}{12}\)	= Rs. 120
Withdrawal on October 1	= Rs. 6000 x \(\frac{6}{100}\) x \(\frac{3}{12}\)	= Rs. 90
Total interest on drawings		= Rs.720