Question : When the Company decided not to record the issue of Debentures as Collateral Security. Which of the following accounts will be credited?
Option 1: % debentures
Option 2: No entry required
Option 3: Capital reserve
Option 4: Debenture suspense account
Answer (1)
17th Jan, 2024
Correct Answer: No entry required
Solution : Answer = No entry required
If the company decides not to record the issue of debentures as collateral security, no entry is required in the accounting records because no transaction is taking place. Therefore, no account needs to be credited in this scenario, hence the correct answer is "No entry required."
Hence, the correct option is 2.
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