Give the adjusting entry and the closing entry for recording commission allowed to a partner, when the firm follows the fixed capital method. (I.S.C. 2015)

SOLUTION

(i) Adjusting Entry:

Partner’s Commission A/c Dr.
To Partner’s Current A/c

(Commission allowed to the partner)

(ii) Closing Entry:

Profit and Loss Appropriation A/c Dr.

To Partner’s Commission A/c

(Transfer of Commission)