Which of the following will be included in case debenture's are issued to vendor at a discount for purchase consideration other than cash?

(A) % Debenture A/c is credited

(B) Vendor A/c is debited

(C) Discount on issue of Debenture A/c is debited

(D) Securities Premium Reserve A/c is credited

Choose the correct answer from the options given below:

(A), (B) and (C) only

The correct answer is option 3- (A), (B) and (C) only.

Sometimes a company purchased assets from vendors and instead of making payment in cash issues debentures for consideration thereof. Such issue of debentures is called debentures issued for consideration other than cash. In that case also, the debentures may be issued at par, at a premium or at a discount then entries made in such a situation are similar to those of the shares issued for consideration other than cash. Journal for the issue at discount is as follows-

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

2. On issue of debentures at a discount-
    Vendors  A/c Dr.
    Discount on Issue of Debenture A/c Dr.
             To Debentures A/c

So, [(A) % Debenture A/c is credited, (B) Vendor A/c is debited, (C) Discount on issue of Debenture A/c is debited] will be included in case debenture's are issued to vendor at a discount for purchase consideration other than cash.