(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

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.

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.

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

Interest on Drawings  = Rs. 20,000 x \(\frac{10}{100}\) x \(\frac{6}{12}\)
= Rs. 1000
Interest on Drawings of Mathew = Rs.1,000

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

(i) The profit and loss appropriation account is an extension of profit and loss account prepared for the purpose of adjusting the transactions relating to amounts due to and amount due from partners. It is a nominal account in nature
(ii) The balance being the profit or loss is transferred to the partner's capital or current account in the profit sharing ratio.

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.

According to section 4 of the Indian partnership Act, 1932, partnership is defined as "the relation between persons who gave agreed to share the profits of a business carried on by all or any of them acting for all".

Calculation of interest on drawings of Priya (using average period)
Total amount of drawings = 4,000 \(\times\) 4 = Rs. 16,000
If drawings are made at the end of every quarter, average period = 4.5
Interest on drawings = Total amount of drawings \(\times\) Rate of interest \(\times\) \(\frac { Average\quad period }{ 12 } \)
= Rs. 16,000 \(\times\) \(\frac { 6 }{ 100 } \times \frac { 4.5 }{ 12 } \) = Rs. 360

Interest on Drawings = 30,000 \(\times\) \(\frac { 10 }{ 100 } \times \frac { 6 }{ 12 } \) = Rs. 1,500

Calculation of interest on capital:
Interest on Antony’s capital:

On opening capital for 1 year	60,000 \(\times\) \(\frac{6}{100}\)	Rs. 3,600
On additional capital for 9 months	10,000 \(\times\) \(\frac{6}{100}\) \(\times\) \(\frac{9}{12}\)	Rs. 450
Interest on capital		Rs. 4,050

 Interest on Akbar’s capital:

On opening capital for 1 year	40,000 \(\times\) \(\frac{6}{100}\)	Rs. 2,400
On additional capital for 6 months	5,000 \(\times\) \(\frac{6}{100}\) \(\times\) \(\frac{6}{12}\)	Rs. 150
Interest on capital		Rs. 2,550

 Note: Since the date of additional capital introduced by Akbar is not given, interest on additional capital is calculated for an average period of 6 months.

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