Final answer:
Formal debt, evidenced by a written contract or note, is reported as a bond. Bonds are financial contracts where the borrower agrees to repay the borrowed amount and an interest rate over a specified time period. They can be issued by firms or different levels of government.
Step-by-step explanation:
Formal debt, evidenced by a written contract or note, is reported as a bond. A bond is a financial contract through which a borrower agrees to repay the amount that was borrowed and also an interest rate over a period of time in the future. Bonds can be issued by both firms and various levels of government, such as cities, states, and the federal government. These bonds specify the amount borrowed, the interest rate, and the time until repayment.