Chhavi and Neha were partners in a firm sharing profits and losses equally. Chhavi withdrew a fixed amount of Rs. 6,000 at the beginning of each quarter. Interest on drawings is charged @ 6% p.a. Pass necessary journal entry for charging interest on drawings at the end of the year. (C.B.S.E. 2019, M.P.)

SOLUTION

Chhavi’s Capital A/c Dr. 900
To Interest on Drawings A/c 900
(Interest on drawings charged)