Shared Flashcard Set

Details

ACC 302 Exam 2
Debt
14
Accounting
Undergraduate 4
09/29/2015

Additional Accounting Flashcards

 


 

Cards

Term
True
Definition
T/F
Early extinguishment of an outstanding bond issue by the issuance of new bonds is called refunding.
Term
True
Definition
T/F If the carrying value of a $100,000 bond is $106,000 and it is extinguished at 105, there is a gain on early extinguishment of debt.
Term
False
Definition
T/F
When the total future payments required in a troubled debt restructure are less than the pre-structure carrying amount of the debt, the debtor needs to compute the new effective interest rate.

Term
False
Definition
T/F
The total amount of interest expense over the life of a bond that was issued at a discount is equal to the total amount of the interest payments minus the amount of the discount.

Term
Convertible Bonds
Definition
Bonds that may be turned in to the issuer in exchange for other securities
Term
Registered Bonds
Definition
Interest is paid only to owners of record as reflected in the accounts of the issuer
Term
Income Bonds
Definition
Interest is paid only in years when the issuer earns a profit
Term
Redeemable Bonds
Definition
The investor has the option of turning in the bond for retirement before maturity date
Term
Coupon Bonds
Definition
An alternative name for this type of bonds is bearer bonds
Term
Serial Bonds
Definition
The principal is paid off in steps (installments)
Term
Debentures
Definition
Unsecured bonds
Term
Term Bonds
Definition
The entire bond issue matures at a single date
Term
Nominal Interest Rate
Definition
The interest rate that is used to calculate the amount of interest to be paid each interest period
Term
Effective Interest Rate
Definition
The interest rate that is used to calculate the amount of interest expense each interest period
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