And notes are scheduled for maturity on one specified

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(and notes) are scheduled for maturity on one specified date.4.Serial bonds(and notes) mature at more than one date (often in series) and are usuallyrepaid over a number of periods.5.Registered bondsare issued in the names and addresses of their holders. Bondpayments are sent directly to these registered holders.6.Bearer bonds, also calledunregisteredbonds, are made payable to whoever holdsthem (the bearer). Many bearer bonds are alsocoupon bonds; each interest couponmatures on a specified interest payment date.7.Convertible bonds(and notes) can be exchanged by for a fixed number of shares of theissuing company’s common stock.8.Callable bonds(and notes) have an option exercisable by theissuer to retirethem at a stated dollar amount prior tomaturity.C.Debt-to-Equity Ratio1.Thedebt to equity ratiois used to determine whether the debtor's pledged assetsprovide adequate security.2.It is calculated as total liabilities divided by total equity.Chapter 11 OutlineI.Corporate Form of Organization—An entity created by law that is separate from itsowners. Owners are calledstockholders.Apublicly heldcorporation offers its stockfor public sale (organized stock market) whereas aprivately heldcorporation doesnot.A.Characteristics of CorporationsAdvantages:1.Separate legal entity—a corporation, through its agents (officers andmanagers), may conduct business affairs with the same rights, duties, andresponsibilities of a person.2.Limited liability of stockholders—generally limited to investment.3.Transferable ownership rights—through stock sale.4.Continuous lifeperpetual life as long as it continues to be successful.5.Lack of mutual agency for stockholders—they do not have the power to bindthe corporation to contracts.6.Ease of capital accumulation—the corporate form enables a corporation toaccumulate large amounts of capital from the combined investments of manystockholders.Disadvantages:32
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ACCT201 Final Study Guide7.Governmental regulation—must meet requirements of a state’s incorporationlaws.8.Corporate taxation—corporate income is taxed; and when income isdistributed to shareholders as dividends, it is taxed a second time as personalincome (double taxation).B.Corporate Organization and Management1.Incorporation—a charter application must be filed with the state. Uponpayment of fees and issuance of the charter the corporation is formed.2.Organizational expensesare the costs to organize a corporation (such aslegal fees, promoters’ fees, and amounts paid to obtain a charter); these costsare expensed as incurred because it is difficult to determine the amount andtiming of future benefits.

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Term
Fall
Professor
Staff
Tags
Accounting, Balance Sheet, Generally Accepted Accounting Principles
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Accounting
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Chapter 6 / Exercise EX6-33
Accounting
Reeve/Warren
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