Bonds[1]

Bonds[1] - D. Bonds Issuing bonds payable or long-term...

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D. Bonds Issuing bonds payable or long-term notes payable is a popular method of financing operations for a corporation. A. Bonds payable are groups of notes payable issued to many lenders (bondholders); they are usually sold through an underwriter . (Exhibit 8-2 illustrates an actual bond certificate.) B. Bonds spread risk over many lenders, as compared with a note payable that has only one lender. C. Principal or par value is the amount printed on the face of the debt instrument and will be repaid at maturity ; it is also called the maturity or face value. D. The contract (stated ) interest rate is always stated on the face of the bond certificate. E. Bonds may be secured (such as a mortgage bond) or may be unsecured (debenture ).
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F. Prices of bonds are quoted on the bond market in eighths of a percentage point. (Refer to Exhibit 8-3 for an example of bond price information on an actual bond.) G. If the market price is less than the maturity (par) value, record a discount on the sale of
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This note was uploaded on 04/19/2008 for the course ACCT 2001 taught by Professor Lowe during the Spring '08 term at LSU.

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Bonds[1] - D. Bonds Issuing bonds payable or long-term...

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