Intermed Acct Ch 14

Front 1

Probable future sacrifice of economic benefit arising from present obligation not paid with a year or operating cycle, whichever longer

Back 1

Long-term debt

Front 2

Promise to pay 1) sum of $ at set maturity date & 2) periodic interest at set rate on maturity amt

Back 2

Bond indenture

Front 3

Backed by pledge of collateral

Back 3

Secured bonds

Front 4

Not backed by collateral

Back 4

Unsecured (debenture) bond

Front 5

Bond that matures on single date

Back 5

Term bond

Front 6

Bond that matures in installments

Back 6

Serial bond

Front 7

Bond that gives issuer right to call & redeem bond prior to maturity

Back 7

Callable bond

Front 8

Bond able to change into other security for specific time after issue

Back 8

Convertible bond

Front 9

Bond redeemable in a measure of commodity

Back 9

Commodity-backed bond (aka asset-linked bond)

Front 10

Bond with no interest, sold at discount that gives buyer’s interest paid at maturity

Back 10

Deep-discount bond (aka zero-interest debenture bond)

Front 11

Bond issued in name of the owner, requiring surrender of cert and issue of new cert to complete sale

Back 11

Registered bond

Front 12

Bond not recorded in name of owner and may be transferred from owner to owner by just delivery

Back 12

Bearer (coupon) bond

Front 13

Bond that pays no interest unless issuing Co is profitable

Back 13

Income bond

Front 14

Bond in which interest is paid from specif revenue source, most frequently issued by airports, school districts, counties, toll road authorities and Gov bodies

Back 14

Revenue bond

Front 15

Int rt written in the terms of bond debenture (usually printed on cert)

Back 15

Stated rate (coupon rt, nominal rt)

Front 16

Stated rt is expressed as percent of...

Back 16

Face value (par value, princ amt, maturity value)

Front 17

Bonds sell for less than Face value

Back 17

Discount

Front 18

Bonds sell for more than face value

Back 18

Premium

Front 19

Rate of int actually earned by bondholders

Back 19

Effective yield rate (market rate)

Front 20

Amortizes a constant amt each Int period

Back 20

Straight-line method

Front 21

Amortizes by producing a periodic Int expense equal to a constant percent of the CV; preferred method

Back 21

Effective-interest method (aka present value amortization)

Front 22

Book value

Back 22

Carrying value (CV)

Front 23

Payment of debt

Back 23

Extinguishment of debt

Front 24

Replacement of existing issuance with new one

Back 24

Refunding

Front 25

Note with stated (or implicit) rate and fixed maturity date, but longer than one year or operating cycle; don’t trade as readily as bonds in org mkt

Back 25

Long-term notes payable

Front 26

Approximate applicable Int rt possibly differing from stated rt

Back 26

Imputation

Front 27

Int rt resulting from approximation (imputation)

Back 27

Imputed Int rt

Front 28

Promissory note secured by document called mortgage, pledging title of property as security for loan

Back 28

Mortgage note payable

Front 29

No current liabs reported at fair value

Back 29

Fair value option

Front 30

Attempt to borrow $ in such a way to prevent recording obligations

Back 30

Off-balance-sheet financing

Front 31

3 types of off-balance-sheet financing

Back 31

1)Non-consolidated subsid 2)Spec-purp entity(spec proj) 3)operating leases

Front 32

Measures percent of tot assets provided by creditors

Tot liabs/ tot assets

Back 32

Debt to assets ratio

Front 33

Indicates Co ability to meet Int pmts as they come due

N inc+Int exp+ inc tx exp/Int exp

Back 33

Times interest earned

Front 34

When creditor grants a concession to debtor that it otherwise wouldn’t consider due to debtor’s financ difficulty; involves 1)settlemt of debt at less than CV or 2)continue of debt w/mods to terms (N/A to mods that reflect gen econ cond. leading to reduced Int rt)

Back 34

Troubled-debt restructuring