Which of the following rules is applicable in the absence of a partnership agreement? Interest is payable

A.

On drawings at the rate of 5% per annum

B.

On any contribution in excess of agreed capital at 5% per annum

C.

At 5% per annum on the current account balances

D.

On agreed capital contributed at 5% per annum

Correct answer is B

If no specific agreement is made by the partners, 5% interest a year on loans made by partners in excess of the agreed capitals.