We are assuming from your question we are dealing with a loan from a parent company to a subsidiary. The change from a debt holding to an equity position is quite straight forward in regards to the journal entries. Shares allocated to the parent would replace the liability.
If there was the desire to not change the paid-up capital of the subsidiary with this change in funding structure, it is difficult to then nominate what the consideration would be for the debt replacement. The allocated of unpaid shares would not form consideration for the debt replacement. Whereas paid-up shares, and therefore a change in paid-up capital, would.
A loan could be replaced by debentures instead, but this is just the replacement of one form of debt for another. They both appear under liabilities on the balance sheet. Unless certain rights wanted to be removed or added, prima facie I can’t see what this would change.
What might help is the change of the debt into convertible debt. A loan could be replaced with a convertible note, that could provide an option or compulsory conversion from debt to equity at some point. This would at least delay any changes to paid-up capital for a period of time. We have a good article here about how to account for convertible debt as part of our accounting tutorial series.