Question

Sudha, Sudama and Sulochna were partners in a firm sharing profits equally. On 31st March, 2020, Sudha retired. On the date of retirement ₹ 2,40,000 became due to her. Sudama and Sulochana agreed to pay Sudha in four equal yearly instalments plus interest @ 10% p.a. on the unpaid balance starting from 31st March, 2021. The firm closes its books on 31st March every year.
Prepare Sudha’s loan account till it is fully paid.

Hint:

Calculate interest every year on outstanding balance before subtracting annual instalment.

Answer 1

Sudha’s Loan Account

Date	Particulars	Amount (₹)
31-03-2021	By Bank (Instalment)	60,000
	By Interest A/c (10% of 2,40,000)	24,000
	Balance c/d	1,80,000
31-03-2022	By Bank (Instalment)	60,000
	By Interest A/c (10% of 1,80,000)	18,000
	Balance c/d	1,20,000
31-03-2023	By Bank (Instalment)	60,000
	By Interest A/c (10% of 1,20,000)	12,000
	Balance c/d	60,000
31-03-2024	By Bank (Instalment)	60,000
	By Interest A/c (10% of 60,000)	6,000