A company which issues a promissory note in lieu of payment for goods purchased
Answer Details
A company which issues a promissory note in lieu of payment for goods purchased is bound to redeem the note for cash on due date. A promissory note is a written promise by one party to pay a sum of money to another party on demand or at a specified future date. When a company issues a promissory note as a means of payment for goods purchased, it is essentially promising to pay the amount owed by the due date. Therefore, the company is obligated to redeem the note and pay the amount owed in cash on the due date specified on the promissory note.