What is a promissory note, and what are some terms that are normally included in promissory notes?

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What is a promissory note, and what are some terms that are normally included in promissory notes?

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What is a promissory note, and what are some terms that are normally included in promissory notes?

Explanation & AnswerSolution by a verified expert

Explanation

A promissory note is a short-term financial instrument in which the company promises to pay bank a definite amount of money either on demand or at a specific future date.
 
The elements that are normally included in the promissory note are the amount borrowed, interest rate, any collateral against the loan, repayment schedule, and any other terms and conditions that the borrower might have agreed upon.

Verified Answer

The promissory note is a negotiable instrument duly signed and stamped by the company, promising bank to pay a certain amount of money at a particular day.
 
Some terms included in the promissory note are rate of interest at which debt is taken, any pledge against the loan, the date at which the loan will be repaid, and so on.

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