The correct answer is D. As there is a loss in the business, interest cannot be paid.
A partnership is a business relationship between two or more people who agree to share the profits and losses of the business. In the absence of an agreement, the partners are presumed to share the profits and losses equally.
If a partner loans money to the partnership, the partnership is generally required to pay interest on the loan. However, if the partnership incurs a loss, the partners are not required to pay interest on the loan. This is because the partners are already sharing the losses of the business.
In the case of A and B, A has given a loan of Rs. 50,000 to the firm. At the end of the year, the business incurred a loss. Therefore, A is not entitled to any interest on the loan.