More information about commercial paper is included in the LegalPoint manual. The obligation in a promissory note to repay the borrowed amount may be structured in a number of ways. Some promissory notes call for repayment of interest only over time, followed by a lump sum payment of the entire borrowed amount. Certain kinds of promissory notes or obligations similar to promissory notes may go by different names. Also, some terms are customarily used with promissory notes.
Bonds are usually negotiable commercial paper and are also securities.
They are often issued by companies to raise capital. This is a particular type of borrowing instrument where the maker, usually a large corporation, creates a charge on certain of its stock or property. Debentures are often issued with coupons, meaning that the holder of the debenture must present a coupon on a specified date to receive interest payments. The interest paid is generally not taxable by either the federal government or the state where the municipal bond was issued. Debt - This is not a particular kind of note or instrument, but rather a general reference to any obligation to pay someone else a sum of money.