Question

Objective type questions.
Answer in are sentence only.

What is meant by ‘Issue’ of debentures for consideration other than cash?

Answer 1

Debentures can be issued for cash or for consideration other than cash. When debentures are issued to the vendors for purchase of assets, it is known as ‘issue of debentures for consideration other than cash’. In other words, vendors are issued debentures for the amount due rather than making payment in cash. Such an issue can be made at a discount, at par or at a premium.