Interest on Capital
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MS: Faedah atas Modal · EN: Interest on Capital · ZH: 资本利息
Meaning
Interest on capital is a reward given to partners on the capital they have invested in the business, calculated at an agreed rate. It is recorded on the debit side of the Appropriation Account and increases the partner's Current Account balance.
Example
Partner Elyana invests capital of RM40,000 at an interest on capital rate of 5% a year, so her interest on capital is RM2,000.
Source: DSKP KSSM Prinsip Perakaunan Tingkatan 5