Intermediate Accounting 2 chap 14

Intermediate Accounting 2 chap 14 - Intermediate Accounting...

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Intermediate Accounting 2 Chapter 14 Long Term Liabilities Longterm debt-probable future sacrifices of economic benefits arising from present obligations that are not payable within a year or the operating cycle of the company, whichever is longer. Bond indenture-contract that a bond arises out of. Bond 1) pays a sum of money at a designated maturity date plus 2) periodic interest at a specified rate on the maturity amount (face value). Types and ratings of bonds: Unsecured bonds- bonds not backed by collateral. Secured-backed by collateral. Debenture bond is unsecured. Term bonds-bond issues that mature on a single date. Serial bonds-issues that mature in installments. Callable bonds give issuer the right to call and retire the bonds prior to maturity. Convertible bonds-if bonds are convertible into other securities of the corporation for a specified time after issuance. Commodity backed bonds (asset-linked bonds)-redeemable in measures of a commodity. Deep discount bonds/zero interest debenture bonds-sold at a discount that provides the
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This note was uploaded on 04/17/2008 for the course ECON 312 taught by Professor Smith during the Spring '08 term at Albion College.

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Intermediate Accounting 2 chap 14 - Intermediate Accounting...

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