What is the difference between crediting interest on capital and transferring interest on capital in the format of journal entries for partnership firms..?
crediting interest on capital means crediting it in capital a/c and transferring means transferring to profit and loss appropriation a/c.
Journal entry of first is interest on capital a/c Dr. To Capital a/c and entry of second will be '' profit and loss appropriation ä/c Dr. To interest on capital a/c''.
Journal entry of first is interest on capital a/c Dr. To Capital a/c and entry of second will be '' profit and loss appropriation ä/c Dr. To interest on capital a/c''.