Business Definition for: retire (a debt)
retire (a debt)
to pay off the
principal
on a loan, thereby fulfilling the obligation under the loan contract.
Example: When Smith made the last monthly payment on his mortgage loan, he retired the debt.
Example: Jones arranged to retire her home improvement loan by paying an amount equal to the remaining principal balance.
See also
amortization
Related Terms:
gradual reduction of an amount over time. Examples are amortized expenses on limited life intangible assets and deferred charges. Assets with limited life have to be written down over the period benefitted. The amortization entry is to debit amortization expense and credit the intangible asset. However, unlimited life intangibles are subject to an annual impairment test.
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