On 1st January, 2000, Star Ltd. issued 1.000. 12% Debentures of Rs 100 each at a discount of 5%. repayable as follows :
On 31st December, 2002 — Rs 20,000
On 31st December, 2003 — Rs 60,000
On 31 st December, 2004 — Rs 20,000
The company pays interest on debentures annually.
You are required to:
(a) Pass the Journal entries (including interest) for the year beginning 1st January, 2000 to 31st December, 2000.
(b) Prepare the ‘Discount on issue of Debenture Account’, till it is finally closed