Correct Answer: Interest on partner's loan

Solution : Answer = interest on partner's loan

Interest on a partner's loan is not typically dealt with through a profit and loss appropriation account. Instead, it is usually accounted for separately as an expense in the income statement or as an adjustment to the partner's capital account. Interest on the loan is charged against profit; interest on the loan shall be paid even if there are losses.
Hence, the correct option is 1.