If a Partnership Contract Provides for Interest at 10% Annually

Multiple Choice

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

A) Is ignored when earnings are not sufficient to pay interest.
B) Is an allowance that can make up for unequal capital contribution.
C) Is an expense of the business.
D) Must be paid because the partnership contract has unlimited life.
E) Legally becomes a liability of the general partner.