interest
Interest
interest
to encourage the partner invest more capital in the business
When capital increases, interest rates fall.
interest
Capital
Interest on capital is added on the capital account in balance sheet as interest incurred from capital is based on business entity assumption.
[Debit] Interest on capital account xxxx [credit] Capital account xxxx
interest on captial a/c dr To Partner's capital a/c
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Interest
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interest
When the rate of interest falls the demand for capital increases because it is cheaper to borrow money.
Colin Rogers has written: 'Money, interest, and capital' -- subject- s -: Capital, Interest, Money
No interest on capital charge upon opening capital and also on fresh capital upto the extent we utilize e.g if use fresh capital for six month then according to six month ratio.