Asked by CHRISTOPHER SAMAYOA on Jun 20, 2024
Verified
To provide security to creditors and to reduce interest costs, bonds and notes payable can be secured by:
A) Safe deposit boxes.
B) Mortgages.
C) Equity.
D) The IASB.
E) Debentures.
Bonds Payable
Long-term liabilities representing amounts owed by a company from issuing bonds, which are required to be repaid at a future date.
- Understand the significance of collateral agreements in securing notes and bonds.
Verified Answer
LT
Larry ThompsonJun 23, 2024
Final Answer :
B
Explanation :
Bonds and notes payable can be secured by mortgages, which are legal agreements that allow creditors to take possession of a borrower's assets, such as property or equipment, in the event that the borrower defaults on the loan. This provides security to the creditors and reduces the interest costs, as the risk of default is lower with a secured loan.
Learning Objectives
- Understand the significance of collateral agreements in securing notes and bonds.
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