Answered: A long-term contract under which a…

A long-term contract under which a borrower agrees to make payments of interest and principal on specific dates is called a:

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter18: Acquiring Capital For Growth And Development

Section18.2: Long-term Debt Financing

Problem 4AYU

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Question

A long-term contract under which a borrower agrees to make payments of interest and principal on specific dates is called a:

Group of answer choices

common stock.

preferred stock.

bond.

equity contract.

Definition Definition Type of stock which is granted priority over dividend distributions as compared to common stockholders. Preferred stocks also do not carry any voting rights. Notably, in a case where a company is going to be liquidated, preferred stockholders have a priority claim on the value of assets of the company as quoted in the balance sheet, as compared to the common stockholders.

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