Concept:Interest on a partner's loan is an expense to the partnership, not a share of profit.
Explanation:When a partner lends money to the firm, the firm must pay interest on it.
This interest is payable even if the firm did not make a profit.
It is first credited to the partner's loan account.
After that, it is transferred to the profit and loss account as a charge.
So, the interest appears on the debit side of the profit and loss account.
This reduces the profit before it is shared among the partners.
Answer:The correct option is C: debited in profit and loss account.