A and M were partners in a fast-food corner sharing profits and losses in ratio 3:2. Theysold fast food items across the counter and did home delivery too. Their initial fixed capitalcontribution was ₹1,20,000 and ₹80,000 respectively. At the end of first year their profit was ₹ 1,20,000 before allowing the remuneration of ₹3,000per quarter to A and ₹2,000 per half year to M. Such a promising performance for firstyear was encouraging; therefore, they decided to expand the area of operations. For this purpose, they needed a delivery van, a few Scotties and an additional person to support. Six months into the accounting year they decided to admit S as a new partner and offeredhim 20% as a share of profits along with monthly remuneration of ₹ 2,500. S was askedto introduce ₹1,30,000 for capital and ₹70,000 for premium for goodwill. Besides this S was required to provide ₹1,00,000 as loan for two years. S readily accepted the offer. The terms of the offer were duly executed and he wasadmitted as a partner. 1. Remuneration will be transferred to of A and M at the end of theaccounting period. a. Capital account. b. Loan account. c. Current account. d. None of the above. 2. Upon the admission of S the sacrifice for providing his share of profits would be done: (a) By A only. (b) By M only. (c) By A and M equally. (d) By A and M in the ratio of 3:2. 3. S will be entitled to a remuneration of at the end of the year. 4. While taking up the accounting procedure for this reconstitution, the accountant of the firm Mr. Mathews faced a difficulty. Solve it be answering the following: For the amount of loan that S has agreed to provide, he is entitled to interest thereon atthe rate of .​