An indenture on long-term debt does all of the following EXCEPT:
A)It lists restrictions placed on the borrower by the lender.
B)It specifies the manner in which the principal must be repaid.
C)It allows the borrower to borrow extensively so that the interest may be regularly paid.
D)It 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 often includes restrictions on the borrower's ability to borrow additional funds or issue additional debt without the lender's approval, in order to protect the lender's interests and ensure repayment of the principal and interest owed.

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