Suppose debentures are issued for consideration other than cash, debentures may:
A. Not be issued at discount
B. Be issued at par
C. Be issued at a premium
D. Be issued at a discount
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → B, C and D only
When a company pays a vendor in debentures instead of cash, the debentures are debentures issued for consideration other than cash. Like debentures issued for cash, they may be issued at par, at a premium or at a discount.
A. Not be issued at discount Incorrect. There is no bar on issuing them at a discount; the discount is debited to Discount on Issue of Debentures A/c.
B. Be issued at par Correct. The vendor gets debentures at their face value.
C. Be issued at a premium Correct. The excess over the face value is credited to Securities Premium Reserve A/c.
D. Be issued at a discount Correct. The vendor accepts debentures worth less than their face value, and the shortfall is the discount.
NCERT (2026-27 edition):
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