Chapter 14 - Part 1(1)(4).ppt

Chapter 14 - Part 1(1)(4).ppt - 14-1 Bonds and Long-Term...

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14-1 Bonds and Long-Term Notes Chapter 14 Part 1
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14-2 The Nature of Long-Term Debt Liabilities signify creditors’ interest in a company’s assets. Liabilities signify creditors’ interest in a company’s assets. A note payable and note receivable are two sides of the same coin. A note payable and note receivable are two sides of the same coin. Periodic interest is the effective interest rate times the amount of the debt outstanding during the period. Debt is reported at its present value Periodic interest is the effective interest rate times the amount of the debt outstanding during the period. Debt is reported at its present value A bond payable divides a large liability into many smaller liabilities. A bond payable divides a large liability into many smaller liabilities. Corporations issuing bonds are obligated to repay a stated amount at a specified maturity date and period interest between the issue date. Corporations issuing bonds are obligated to repay a stated amount at a specified maturity date and period interest between the issue date.
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14-3 Bonds Bond Selling Price Bond Selling Price Bond Certificate Bond Certificate Interest Payments Interest Payments Face Value Payment Face Value Payment at End of Bond Term at End of Bond Term At Bond Issuance Date At Bond Issuance Date Company Company Issuing Issuing Bonds Bonds Company Company Issuing Issuing Bonds Bonds Subsequent Periods Subsequent Periods Investor Investor Buying Buying Bonds Bonds Investor Investor Buying Buying Bonds Bonds Company Company Issuing Issuing Bonds Bonds Company Company Issuing Issuing Bonds Bonds Investor Investor Buying Buying Bonds Bonds Investor Investor Buying Buying Bonds Bonds
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14-4 The Bond Indenture The specific promises made to bondholders are described in a document called a bond indenture. The specific promises made to bondholders are described in a document called a bond indenture . Mortgage Bond secured by lien on specific real estate owned by the issuer. Mortgage Bond secured by lien on specific real estate owned by the issuer. Callable Bond allows company to buy back outstanding bonds prior to maturity. Callable Bond allows company to buy back outstanding bonds prior to maturity.
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  • Spring '13
  • woodward
  • Target Corporation

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