Promissory Note
Definition: A written financial instrument containing a signed promise to pay a definite sum of money to the payee on demand or at a specified future date. Key…
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A written financial instrument containing a signed promise to pay a definite sum of money to the payee on demand or at a specified future date. Key elements include the maker, payee, principal, interest rate, and maturity date.
Related Subjects
Components
- Maker of the NoteThe party who signs and promises to pay
- Payee of the NoteThe party who receives the promise to pay
- Maturity DateThe date payment is due, specified in the note
Related
- Notes ReceivableA promissory note creates a notes receivable for the payee
- Maturity ValuePrincipal plus interest due at maturity
Contrast
- Accounts ReceivableA/R is informal; a promissory note is a formal legal document
External Links
- Promissory note — Wikipedia