Debt
An amount of money borrowed by one party from another. Many corporations/individuals use debt as a method for making large purchases that they could not afford under normal circumstances. A debt arrangement gives the borrowing party permission to borrow money under the condition that it is to be paid back at a later date, usually with interest. Investopedia Says:
Bonds, loans and commercial paper are all examples of debt. For example, a company may look to borrow $1 million so they can buy a certain piece of equipment. In this case, the debt of $1 million will need to be paid back (with interest owing) to the creditor at a later date. Related Terms:
Accounts Payable
Collection Agency
Debenture
Debt Security
Debt/Equity Ratio
Funded Debt
Liability
Net Debt
Non-Recourse Debt
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