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Unformatted text preview: $4,164 Premium on Bonds Payable $336 Cash ($100,000 x 4.5%) $4,500 Retiring Bonds Before Maturity Interest rates may change causing companies to retire bonds early Borrowing rates may become less than interest rate on bonds Some bonds are callable Company can pay off bonds a specific price Convertible bonds Bondholders may exchange bonds for companys stock Offers investor: Assured receipt of interest and principal on bonds Opportunity for gains on stock Investors will accept a lower interest rate on bonds because of the attractiveness of this feature....
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This note was uploaded on 06/15/2011 for the course ACCT 23020 taught by Professor Dorff,p during the Spring '08 term at Kent State.
- Spring '08
- Financial Accounting