An indenture on long-term debt does all of the following EXCEPT it ________.
A) lists restrictions placed on the borrower by the lender
B) specifies the manner in which the principal must be repaid
C) allows the borrower to borrow extensively so that the interest may be regularly paid
D) details the nature of the debt issue

Question

Quizplus · Accepted Answer

An indenture on long-term debt does not allow the borrower to borrow extensively so that the interest may be regularly paid. In fact, it typically includes provisions that limit the borrower's ability to incur additional debt or take certain actions without the lender's approval. The other options (A, B, and D) are all typical components of an indenture on long-term debt.

An Indenture on Long-Term Debt Does All of the Following