on 1st April, 2018, Sunshine Ltd. Issed ₹ 10,00,000, 15% Debentures of ₹ 100 each at 8% discount payable:
₹ 40 on application, and
The balance on allotment.
These debentures were to be redeemed at a premium of 5% after five years. All the debentures were subcribed for by the public.
Interest on these debentures was to be paid half-yearly which was duly paid by the company. You are required to:
(i) Pass Journal entries in the first year of debenture issue (including entries for debenture interest.)
(ii) Prepare 15% Debentures Account for the year ending 31st March, 2019.

Explanation