On 1st April, 2016. Krayon Ltd. issued 8,000, 12% Debentures of ? 100 each, redeemable at par after 5 years. The issue was fully subscribed. According to the terms of issue, interest on debentures is payable annually on 31st March. Tax deducted at source is 20%.
You are required to pass journal entries for the year 2016-17, regarding issue of debentures and interest on debentures.
