Why is the answer C and not A? The question clearly says only 50% of the building is used for for business purposes so only 1,20,000 should be paid by the business. The question does not say that the other 1,20,000 was a drawing so why would we subtract 2,40,000 instead of just 1,20,000? The owner could've used his other personal funds for renting his personal part of the building

Dear Student,
You are right. The question seems wrong. Because 20,000 x 12 = 240,000 was paid in total for accommodation.
From which 50% was used for business and 50% for Personal purpose, which will be regarded as drawings.
Therefore, 240,000 x 50% = 120,000 each for drawings and business.
Option A is correct.

Journal entry would be :-
Sno. Particulars L.F Debit Credit
  Rent A/c Dr.   120,000  
      To Cash A/c     120,000
  (Being Rent paid)      
         
  Drawings A/c Dr.   120,000  
      To Cash A/c     120,000
  (Being rent paid for personal purpose)      
 
Regards

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