In case of issue of debentures to a vendor for consideration other than cash, _________ is debited.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Vendor Account
When assets are bought from a vendor, the vendor is credited. When debentures are then issued to the vendor in payment, the Vendor Account is debited and Debentures Account is credited.
Option (1) Debenture Account — Incorrect. Debentures Account is credited, as debentures are issued.
Option (3) Statement of Profit & Loss Account — Incorrect. Issue of debentures is not an expense or a loss.
Option (4) General Reserve Account — Incorrect. Reserves play no part in paying a vendor.
NCERT (2026-27 edition):
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