Read the following information and answer the questions:
On 1st April 2013, a company made an issue of 10,000, 9% debentures of ₹100 each at ₹92 per debenture. The terms of issue provided for redemption of 2,000 debentures every year starting from 31st March 2016, either by conversion into equity shares of ₹20 each or by draw of lot at par at the company's option. On 31st March 2016, the company redeemed 2,000, 9% debentures by converting them into equity shares of ₹20 each.
Which A/c will be debited at the time when amount is received on issue of debentures?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Bank A/c
Money received from the applicants for debentures comes into the bank, so Bank A/c is debited and the debenture application (or application and allotment) account is credited.
Bank A/c Dr. — To Debenture Application A/c
NCERT (2026-27 edition):
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