Which of the following will be included in the journal entry when debentures are issued to a vendor at a discount for a purchase consideration other than cash?(A) % Debenture A/c is credited(B) Vendor A/c is debited(C) Discount on Issue of Debenture A/c is debited(D) Securities Premium Reserve A/c is creditedChoose the correct answer from the options given below:
- A(A), (B), (C) and (D)
- B(A), (C) and (D) only
- C(A), (B) and (C) only
- D(B), (C) and (D) only
Solution & Step-by-step Explanation
The journal entry for issuing debentures to a vendor at a discount is:
Therefore, Vendor A/c is debited (B), Discount on Issue of Debenture A/c is debited (C), and % Debenture A/c is credited (A). Securities Premium Reserve (D) does not apply here as it is only used during an issue at a premium.
Therefore, Vendor A/c is debited (B), Discount on Issue of Debenture A/c is debited (C), and % Debenture A/c is credited (A). Securities Premium Reserve (D) does not apply here as it is only used during an issue at a premium.