Question

Which of the following is/are true with respect to debentures?

• A. They can be issued for cash.
• B. They can be issued for consideration other than cash.
• C. They cannot be issued as collateral securities.
• D. Both (A) and (B) above.

Answer 1

The correct option is D Both (A) and (B) above.

Sometimes a company purchases assets from vendors and instead of making payment in cash issues debentures for consideration thereof, such issue of dentures is called as issue for consideration other than cash. Debenture can be issued for cash and collateral security.