Describe the characteristics of long-term notes and bonds payable.

 

Characteristics of long-term notes and bonds payable:

Debt is a volume of money sharpen by one party from another. There are two basic types of long-term debt -

Bonds are financing documents offered by a borrowing company to an investor. There are some characteristics of a bond. Such as- 

• Bond issues are usually for a tremendous amount of money.
• Issuance of bonds delivers several lenders to share the risk and return on big scale borrowing be determining how many bonds to purchase; 
• Bonds are generally traded in the financial markets and allow investors to buy and sell.

Notes are written commitments to pay an amount of money to a lender at a fixed time.

• Notes may fruit from business conditions involving goods and receivables or as a result of borrowing money.
• Notes have emerged for relatively small sums of money that one investor can handle in terms of risk and required capital outlay. 
• Notes are generally adopted by the issuer or discounted in a specialized or limited manner. 
• Notes are issued in the amount borrowed rather than a pre-founded volume.