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20 Cards in this Set
- Front
- Back
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Bond |
A financial instrument that allows firms to borrow money and repay the loan over a long period of time |
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Bond issue price |
The present value of the annuity of interest payments plus the present value of the principal |
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Callable bonds |
Bonds that may be redeemed or retired before the specified due date |
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Capital lease |
A lease that is recorded as an asset by the lessee |
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Carrying value |
The face value of a bond plus the amount of unamortized Premium or minus the amount of unamortized discount |
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Collateral |
The assets that back secured bond in case the issuer must default on the loan |
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Debenture bonds |
Bonds that are not backed by specific collateral |
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Discount |
The excess of the face value of bonds over the issue price |
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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 |
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Face rate of interest |
The rate of interest on the bond certificate |
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Face value |
The principal amount of the bond as stated on the bond certificate |
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Gain or loss on Redemption |
The difference between the carrying value and the redemption price at the time bonds are redeemed |
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Lease |
A contract allowing the lessee the right to use an acid in exchange for making payments to its owner, the lessor |
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Long-term liability |
And obligation that would not be satisfied within one year or the current operating cycle |
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Market rate of interest |
The rate that investors could obtain by investing in other bands that are similar to the issuing firm's bonds |
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Operating lease |
At least it does not meet any of the four criteria and is not recorded as an asset by the lessee |
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Premium |
The excess of the issue price over the face value of the bonds |
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Redemption |
Retirement of the bonds by repayment of the principal |
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Redemption price |
The price to be paid by the bond issuer were upon exercising the call provision |
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Serial bonds |
Bonds that do not all have the same due date, a portion of the bonds comes due each time period. |
