Promissory note

A promissory note is a written agreement under which one party agrees to pay another party a certain amount of cash on a future date. The date may be a fixed date sometime in the future, or on demand. The note typically contains the following information:

The payee is the holder of a promissory note. Once the underlying funds have been paid to the payee, the payee cancels the note and returns it to the maker. A promissory note differs from an IOU in that the note states the specifics of repayment, while an IOU only acknowledges that a debt exists.

Related Courses

Corporate Finance 
Treasurer's Guidebook