Question

The company may allot debentures to the vendors for acquiring some assets as payment or purchase consideration, such issue of debentures to vendors is known as issue of debentures for_____.

• A. cash
• B. consideration other than cash
• C. with consideration
• D. without consideration

Answer 1

The correct option is B consideration other than cash

Debentures can be issued for cash as well as non-cash considerations such as collateral security. The company may have purchased assets from some vendors or acquired some other business. Then instead of paying cash, the company may issue debentures to such vendors. Such an issue for debentures can be at par, or for a discount or at a premium.