In case of Issue of debentures to a vendor for consideration other th…

The correct answer is Option (2) - Vendor Account.

In case of Issue of debentures to a vendor for consideration other than cash vendor A/c is Debited.

 

1) On purchase of assets- Sundry Assets A/c Dr.
                                                      To Vendor’s A/c

2) On issue of debentures-
(a) At par-
Vendors Dr.
     To Debentures A/c

(b) At premium-
Vendors Dr.
     To Debentures A/c
     To Securities Premium Reserve A/c

(c) At a discount-
Vendors Dr.
Discount on Issue of Debenture A/c Dr.
     To Debentures A/c