Difference between revisions of "Promissory note"
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For example, a bank will require a promissory note in exchange for loaning someone money, and the promissory note will specify how that money must be repaid. | For example, a bank will require a promissory note in exchange for loaning someone money, and the promissory note will specify how that money must be repaid. | ||
| − | Such terms of repayment will include [[interest rate]], frequency of payments, any [[penalties]] regarding late or early payments, and how the [[ | + | Such terms of repayment will include [[interest rate]], frequency of payments, any [[penalties]] regarding late or early payments, and how the [[principal]] of the loan is [[amortized]]. |
| − | + | [[Category:Accounting]] | |
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Latest revision as of 22:50, September 3, 2025
A promissory note is a written promise by someone to pay a specific amount of money by a certain date. It is the formal name for an "I.O.U."
For example, a bank will require a promissory note in exchange for loaning someone money, and the promissory note will specify how that money must be repaid.
Such terms of repayment will include interest rate, frequency of payments, any penalties regarding late or early payments, and how the principal of the loan is amortized.