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12 Cards in this Set
- Front
- Back
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How do you get the selling price of serial bonds?
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Compute the PV of the principal & int payments for each series separately
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What's the six part amortization table?
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Period Cash Int Pymts Int Exp Prem Amort Unamort Prem Carrying Value
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How are proceeds allocated btw a debt security & stk warrants?
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Based on relative FV's.
Note: If the FV of one security is not determinable, the proceeds are assigned based on the FV of the other security. Warrants are accted for as Paid In Capital |
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What are the two methods of accting for convertible bonds & how are they different?
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Book Value Method (No G or L recognized)
Market Value Method |
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Is an additional amount paid for int when purchasing a bond part of the cost of the investment?
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No
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Is G or L in sale of bonds held for investments an extraordinary item?
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No
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Name some bond issue costs.
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Legal Fees, accting fees, underwriting commissions, registration, printing & engraving & other costs incurred in preparing and selling a bond issue.
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What's the diff btw extinguishment & refunding?
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Extinguishment includes the reacquisition of debt securities.
Refunding - you're using proceeds from issuing other securities for the reacquisition. |
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When does a bond sell at par?
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When stated int rate = market rate
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What are the five types of bond (debt) securities?
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1. HTM Securities
2. Serial & Term Bonds 3. Debenture 4. Callable 5. Convertible |
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How does a premium affect the bond investment and investment income over time?
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It decreases them
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When amortizing bond issue costs when a bond is sold btw int dates, when does the period begin?
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Amortize over the period from the date of sale to the maturity date!!
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