Term
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Definition
| Bonds obligate the issuing corporation to repay a stated amount at a specified maturity date. |
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Term
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Definition
| A bonds that don't show the name of the owner on it,the holder actually clipped an attached coupon and redeemed it in accordance with instructions on the indenture. |
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Term
| What does it mean when a bond is callable? |
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Definition
| The corporation can call back, or buy back outstanding bonds from bondholders before there scheduled maturity date. |
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Term
| What is a sinking bond debenture? |
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Definition
| Bonds that must be redeemed on a prespecified year-by-year basis; administered by a trustee who repurchases bonds in the open market. |
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Term
| How do you record bonds if you are the issuer? |
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Definition
| You debit cash for the amount of the bonds, and you credit bonds payable for the amount of the bonds. |
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Term
| How do you record bonds if you are the investor? |
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Definition
| You debit investment in bonds for the amount of the bonds, and you credit cash for the amount of the bonds. |
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Term
| What does it mean when bonds sell at a premium? |
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Definition
| They sell for more then the face amount. |
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Term
| What does it mean when bonds sell at a discount? |
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Definition
| They are selling for less then the face amount. |
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Term
| How do you determine the interest for bonds? |
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Definition
| You take the amount of cash you paid for the bonds and multiple that by the interest rate and you get your answer. |
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Term
| What are zero coupon bonds? |
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Definition
| They are bonds that pay no interest. |
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Term
| What are convertible bonds? |
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Definition
| They are bonds that can be exchanged for shares of stock at the option of the investor. |
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Term
| What is ment be early extinguishment of debt? |
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Definition
| When debt of any type are retired before there scheduled maturity. |
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Term
| What are bonds that have a detachable stock purchase warrent with them? |
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Definition
| A warrent that gives the investor an option to purchase a stated number of shares of common stock at a specified option price, often within a given period of time. |
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Term
| How is a price determined for a bond? |
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Definition
| The stated price on the bond determines how much it will cost someone to buy. |
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