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Under Section 13(c), where a partner is entitled to interest on the capital he subscribed, such interest is payable:
AIn all circumstances
BOnly out of profits
CAt 6% even if there are losses
DOut of capital
Answer & Solution
Correct answer: B. Only out of profits
Section 13(c): interest on capital, where allowed, is payable only out of profits; it is not paid where the firm has no profits.
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