Accounting chap 10 vocab

Accounting chap 10 vocab - rate, or coupon rate. Face value...

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Vocab Chapter 10 Bond issue price – the present value of the annuity of interest payments plus the present value of the principal. Callable bonds – bonds that may be redeemed or retired before their specified due date. Capital lease – a lease that is recorded as an asset by the lessee. Carrying value – the face value of a bond plus the amount of unamortized premium or minus the amount of unamortized discount; book value. Debenture bonds – bonds that are not backed by specific collateral. Discount – the excess of the face value of bonds over the issue price. Effective interest method of amortization – the process of transferring a portion of the premium or discount to interest expense; this method results in a constant effective interest rate. Face rate of interest – the rate of interest on the bond certificate; stated rate, normal
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Unformatted text preview: rate, or coupon rate. Face value the principal amount of the bond as stated on the bond certificate; par value. Gain or loss on redemption the difference between the carrying value and the redemption price at the time bonds are redeemed. Long-term liability an obligation that will be settled within one year or the current operating cycle. Market rate of interest the rate that investors could obtain by investing in other bonds that are similar to the issuing firms bonds; yields, effective rate. Operating lease a lease that does not meet any of the four criteria and is not recorded as an asset by the lessee. Premium the excess of the issue price over the face value of the bonds. Serial bonds bonds that do not all have the same due date; a portion of the bonds comes due each time period....
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This test prep was uploaded on 04/09/2008 for the course ACC ? taught by Professor Tanzola during the Fall '08 term at Saint Joseph's University.

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