Bond Debenture

Accounting Dictionary

Bond Debenture

The contract between the company issuing a bond and the investors buying a bond is called a bond indenture.

When a company wants to borrow money, it issues a bond. If the company issued a five year bond, it would then be obligated to pay interest on the money it borrowed for five years then repay the principal at the end of year five. The actual contract that lays out all the specifics is the bond indenture.

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