Three methods of adjustment will be shown.
First Method
A’s excess is $3,000, interest on which is $180.
B’s deficit is $2,000, interest on which is $120.
C’s deficit is $4,000, interest on which is $240.
These three interest amounts are brought upon the books by the following journal entries:
| Profit and Loss | 180.00 | ||
| A | 180.00 | ||
| B | 120.00 | ||
| C | 240.00 | ||
| Profit and Loss | 360.00 | ||
The Profit and Loss account then shows a credit balance of $180, which is distributed as follows:
| Profit and Loss | 180.00 | ||
| A | 60.00 | ||
| B | 60.00 | ||
| C | 60.00 | ||
The net effect of these adjustments is a credit to A of $240, and debits to B and C of $60 and $180 respectively.