The correct answer is: Asha will be debited with Rs. 1,500 and Vipasha will be credited with Rs. 1,500
Asha and Vipasha are equal partners with fixed capitals of Rs. 5,00,000 and Rs. 2,00,000, respectively. After closing the accounts for the year ending 31st March 2019, it was discovered that the interest on capitals was provided @ 6% per annum instead of 5% per annum.
The interest on capitals for Asha for the year ending 31st March 2019 is:
= 5,00,000 x 6/100 x 12/12
= Rs. 1,500
The interest on capitals for Vipasha for the year ending 31st March 2019 is:
= 2,00,000 x 6/100 x 12/12
= Rs. 600
The adjusting entry to record the interest on capitals is:
Interest on Capitals A/c Dr.
To Asha’s Capital A/c
To Vipasha’s Capital A/c
= 1,500
= 1,500
= 600
Therefore, Asha will be debited with Rs. 1,500 and Vipasha will be credited with Rs. 1,500.
Explanation of each option:
- Option A: Asha will be debited with Rs. 1,500 and Vipasha will be credited with Rs. 1,500. This is the correct answer.
- Option B: Asha will be credited with Rs. 1,500 and Vipasha will be debited with Rs. 1,500. This is incorrect because Asha should be debited, not credited.
- Option C: Asha will be debited with Rs. 5,000 and Vipasha will be debited with Rs. 2,000. This is incorrect because the interest on capitals for Asha is only Rs. 1,500, not Rs. 5,000.
- Option D: Asha will be credited with Rs. 5,000 and Vipasha will be credited with Rs. 2,000. This is incorrect because the interest on capitals for Vipasha is only Rs. 600, not Rs. 2,000.