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Issue of Debentures for Consideration other than Cash

Similar to shares, debentures can also be issued for consideration other than cash, towards the purchase of an asset. In such a case, the following entries are passed:


Illustration 2


A Ltd. purchased a machinery worth ₹ 5 lakhs from B Ltd. It was decided by A Ltd to issue 12 per cent debentures to B Ltd in satisfaction of its claims. Pass the necessary journal entries.




Journal Entries in the Books of A Ltd.


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