When a Partner Makes an Advance or Loan to the Partnership

Multiple Choice

When a partner makes an advance or loan to the partnership, which of the following statements is correct?
I.The partner is entitled to interest at the rate of 7% p.a. unless there is an agreement to the contrary.
II.The amount loaned is added to the partner's equity account balance.
III.Interest on the loan is regarded as an expense of the partnership and appears in the income statement.

A) I and II
B) I and III
C) II and III
D) I, II and III