In the absence of a partnership agreement, a loan given to the partnership by a partner attracts interest of
A. 7 \(\frac{1} {2}\) % B. 5% C. 15% D. 10%
Correct Answer: B
Explanation
Where there is no agreement betwen the partners, the following must applied: - there is no interest on capital - no salary for partners acting in the business - no interest to be charged on drawings - profit and loss are to be shared equally - 5% interest a year on loans made by partners in excess of the agreed capitals - no partners may introduce a new person without the consent of all existing partners
