On 1st April 2019, Rachna ltd issued 40,000,8%debentures of Rs.50 each at a discount of 6% redeemable at par after 4 years. The issue was fully subscribed. According to the terms of issue , interest on the debentures is payable yearly on 31st march and the tax deducted at source is 10%. Journalize related to the debenture interest for the year ending 31st march 2020 and transfer of interest on debentures of the year to statement of P&L. Also prepare the discount on issue of debentures account assuming that the company has a balance of Rs.80,000 in securities premium reserve account.
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