In-substance defeasance is a term used to refer to an arrangement whereby A) a government unit agrees to make payments on behalf of the company to the creditor. B) a company legally settles its liability through the issuance of another bond. C) the creditor of the original debt agrees to look to another company/trust for repayment and give up its claim on the company. D) a company provides for the future payments of a long-term liability by placing purchased securities in an irrevocable trust.
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Step 1: In-substance defeasance is a technique used by companies to eliminate debt from their balance sheets without actually repaying the debt. Show more…
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