State the closing entries for: (a) rent paid to a partner; (b) interest on loan allowed to partners.

SOLUTION

(a) Profit & Loss A/c                                           Dr.
To Rent A/c               
(Closing of rent paid to the partner)


(b) Profit & Loss A/c                                           Dr.

To Interest on Partner’s Loan A/c  
(Closing of interest on partner’s loan A/c)]

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