2. For Interest on Drawings
(i) Interest on Drawings is a gain to the firm and is charged to Partner's Capital/Current
Account
Partners Capital/Current a/c Dr.
Interest on Drawings a/c
(ii) For transferring Interest on Drawings to Profit and Loss Appropriation Account, the
following entry is to be recorded:
Interest on Drawings a/c Dr.
Profit and Loss Appropriation a/c