Whenever __________ are sold by a company,they pay out interest payments to the purchaser,and the amount of the sale is shown as a liability on the balance sheet.

Question

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When a company sells bonds, they are essentially taking on a loan from the purchaser. As a result, they must pay out interest payments to the bondholder, which are considered a liability on the balance sheet. Stocks represent ownership in a company, short-term loans do not necessarily involve interest payments, and capital assets are not liabilities on the balance sheet.

Whenever __________ Are Sold by a Company,they Pay Out Interest