Explain why No entry is to be recorded at the time of issue
Of such debentures as Collateral Security.
my question
https://www.meritnation.com/ask-answer/question/monu-ltd-issued-25-000-10-debenture-0f-rs-100-each-gi/issue-and-redemption-of-debentures/4155780
@Shadab and Kavya, definitely both of you are correct that in the concerned case, even if we follow the method in which no Journal entries are passed to record the issue of debenture as collateral security, Bank A/c Dr. To Bank Loan A/c should have been passed. As per the Class-XII standard, this is merely done to tally both the sides of the Company's Balance Sheet, however, in the higher studies, generally we don't pass this Journal entry. Thus, at this stage, you should pass this Journal entry if question comes from this topic in the board exam.