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If a partnership contract provides for interest at 10% annually on each partner's investment, the...

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Accounting

If a partnership contract provides for interest at 10% annually on each partner's investment, the interest:

a. Provides for the sharing of a portion of the partnership earnings in the capital ratio.

b. Is an expense of the business.

c. Must be paid in cash.

d. Legally becomes a liability of the partnership.

e. Is ignored when earnings are not sufficient to pay interest.

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