Asked by Kayden Ngenzi on Jul 26, 2024
Verified
The person who signs a note receivable and promises to pay the principal and interest is the:
A) Maker.
B) Payee.
C) Holder.
D) Receiver.
E) Owner.
Note Receivable
A written promise that a specified amount of money, plus potentially interest, will be paid by one party to another by a specific date.
Maker
In finance, the party that creates or issues a financial instrument, such as a check.
Principal
The original sum of money borrowed in a loan, or the original amount invested, excluding any interest or dividends.
- Identify the roles of involved parties in a promissory note transaction.
Verified Answer
AB
Amanda BorisowJul 27, 2024
Final Answer :
A
Explanation :
The person who signs a note receivable and promises to pay the principal and interest is known as the maker. They are responsible for making payments on the note and are legally obligated to fulfill the terms of the agreement. A payee is the one who receives payments from the maker, while a holder is someone who holds the note and can also receive payments. The terms receiver and owner are not typically used in relation to notes receivable.
Learning Objectives
- Identify the roles of involved parties in a promissory note transaction.