ABC Limited purchased assets of a book value of र2,00,000 from another company and agreed to make the payment of purchase consideration by issuing 2,000, 10% debentures of र100 each. What will be the journal entry for the issue of the debentures?

Vendor A/c Dr.       र2,00,000
     To 10% Debentures A/c      र2,00,000
(Debentures issued)

The correct answer is option 1-
Vendor A/c Dr.       र2,00,000
     To 10% Debentures A/c      र2,00,000
(Debentures issued)

1. On purchase of assets:
Sundry Assets A/c Dr.    र2,00,000
     To Vendor A/c               र2,00,000

2. On issue of debentures at par:
Vendor A/c  Dr.                         र2,00,000
           To 10% Debentures A/c         र2,00,000