What does the entity loaning the money record when it has a bond receivable?

When an entity lends money through a bond receivable, it records the bond as an asset on its balance sheet. In this context, the lender is effectively providing a loan to the bond issuer, making it a creditor.

As a creditor, the entity expects to receive interest payments as well as the principal amount back at the bond's maturity date. This relationship is established legally through the bond agreement, which outlines the repayment terms and interest obligations. The classification of the lender as a creditor highlights its role in the financing aspect of the bond transaction, reinforcing the understanding of financial relationships in the context of bonds.

Other roles mentioned, like debtor or equity owner, do not apply to the situation of holding a bond receivable. A debtor refers to the issuer of the bond who has taken on the obligation to repay, while an equity owner pertains to stakeholders in a corporation who possess equity (ownership) interests rather than debt investments like bonds. An asset holder is a vague term and does not define the specific role in the lending scenario. Therefore, identifying the lender as a creditor is the most accurate and precise designation in this financial context.