Journal Entries:

1. Bad Debts Recovered:
Debtor's A/c Dr. 20,000
To Bad Debts Recovered A/c 20,000

2. Salary Due to Clerks:
Salary A/c Dr. 5,000
To Salary Payable A/c 5,000

3. Prepaid Expenses:
Prepaid Expenses A/c Dr. 1,000
To Expenses A/c 1,000

4. Depreciation on Furniture:
Depreciation A/c Dr. 500
To Furniture A/c 500

5. Interest on Capital:
Interest on Capital A/c Dr. 12,000
To Capital A/c 100,000

6. Interest on Drawings:
Drawings A/c Dr. 800
To Interest on Drawings A/c 800

Explanation:

1. Bad Debts Recovered:
When a debtor who was earlier written off as a bad debt pays his dues, it is known as bad debts recovered. In this case, Subhash has paid ₹20,000, which was written off as a bad debt in the previous year. As a result, we debit the debtor account and credit the bad debts recovered account.

2. Salary Due to Clerks:
When salaries are due to the employees, it is recorded as a liability in the books of accounts. In this case, the salary due to the clerks is ₹5,000, which we need to pay. Therefore, we debit the salary account and credit the salary payable account.

3. Prepaid Expenses:
When a payment is made in advance for expenses that will be incurred in the future, it is known as prepaid expenses. In this case, ₹1,000 has been paid in advance for expenses that will be incurred in the next year. Therefore, we debit the prepaid expenses account and credit the expenses account.

4. Depreciation on Furniture:
Depreciation is a method of allocating the cost of a tangible asset over its useful life. In this case, the furniture has a cost of ₹5,000, and we need to provide 10% depreciation on it. Therefore, we debit the depreciation account and credit the furniture account.

5. Interest on Capital:
When a partner invests capital in a partnership firm, he is entitled to get interest on the amount invested. In this case, the partner has invested ₹100,000, and we need to provide 12% interest on it. Therefore, we debit the interest on capital account and credit the capital account.

6. Interest on Drawings:
When a partner withdraws money from the partnership firm for personal use, it is known as drawings. In this case, the partner has withdrawn ₹800, and we need to charge interest on it. Therefore, we debit the drawings account and credit the interest on drawings account.

1) cash A/C Dr
To Bad debts recovered A/C
Being bads debts recovered

2)Salaries A/C Dr. 4000
To Salaries outstanding 4000
Being salaries outstanding

3) Depreciation A/C Dr 500
To furniture A/C 500
Being the depriciation on furniture

4)Interest on capital A/C Dr 12000
To cashA/C 12000
Being the interest on capital @12%

5)Cash A/C Dr 800
To interest on drawing A/C 800
Being the interest on drawing