Bade Miya & Chote Miya decided to buy a house. They searched and found a house worth ₹25 Cr at a good locality. Now the problem of funding arises.

They decided to take a Housing loan. The bank was willing to give the loan of ₹18 Cr based on the income of Bade Miya and an additional loan of ₹2Cr based on the Chote Miya’s income. So, the funding of ₹20 Cr was done by taking the Housing loan and the balance was brought by their personal saving of ₹2.5 Cr each. Based on the contribution they decided the ownership ratio in the house.

The Bade Miya had a bank account through which the monthly EMI payment of ₹2,00,000 was taking place. They let out the house on monthly rent of ₹1,00,000. This amount was credited in the Chote Miya’s bank account. At the year end the housing loan certificate showed the total principal payment for the year as ₹5,00,000 and the balance as Interest payment of the loan.

Request you to pass the necessary journal entries in the books of Bade Miya & Chote Miya, and tell them the amount of settlement between them at the year end.