14 2 bonds at bond issuance date company company

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Unformatted text preview: e issue date. 14-2 Bonds At Bond Issuance Date Company Company IIssuing ssuing Bonds Bonds Bond Selling Price Bond Certificate Investor Investor Buying Buying Bonds Bonds Subsequent Periods Company Company IIssuing ssuing Bonds Bonds Interest Payments Face Value Payment at Face End of Bond Term End Investor Investor Buying Buying Bonds Bonds 14-3 The Bond Indenture Debenture Bond secured by the “full faith and credit” of company. Mortgage Bond secured by lien on specific real estate owned by the issuer. The specific promises made to bondholders are described in a document called a bond indenture. Coupon Bond pays interest when investor submits attached coupon. Callable Bond allows company to buy back outstanding bonds prior to maturity. 14-4 Determining the Selling Price Stated interest rate is: Below market rate Equal to market rate Above market rate The bonds sells: At a discount (Cash received is less than face amount) At face amount (Cash received is equal to face amount) At a premium (Cash received is greater than face amount) 14-5 Bond Amortization Schedule Here is a bond amortization schedule showing the cash interest, effective interest, discount amortization, and the carrying value of the b...
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This document was uploaded on 02/16/2014 for the course ACC 311 at Cal Poly Pomona.

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