A Guaranty Requires Consideration to Be Enforceable

question 34

True/False

A guaranty requires consideration to be enforceable.

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Definitions:

Accrued Interest

Interest that has accumulated but remains unpaid.

Discount on Bonds Payable

The difference between the face value of a bond and its lower selling price before maturity, reflecting investor perceptions of risk or interest rate differences.

Adjusting Entry

An accounting entry made at the end of an accounting period to allocate income and expenditure to the correct period for a more accurate financial statement.

Face Value

The nominal value stated on a financial instrument, such as a bond or stock, representing its official worth.