Flashcards
Accounting 201- Chapter 10
Cards in this deck (15)
- 1Bond PrincipalThe amount (a) payable at the maturity date of the bond and (b) which the periodic cash interest payments are computed
- 2DebentureAn unsecured bond, no assets are specifically pledged to guarantee repayment
- 3Callable BondMay be called for early retirement at the option of the issuer
- 4Bond CertificateThe bond document that each bondholder receives
- 5TrusteeAn independent party appointed to represent bondholders
- 6Default RiskBond issuer will not be able to pay back bond principal
- 7PrincipalUsually a single payment that is made when the bond matures
- 8Cash Interest PaymentsComputed by multiplying the principal amount by the interest rate stated in the bond contract
- 9Coupon RateThe stated rate of interest on bonds
- 10Bond PremiumThe difference between selling price and par when the bond is sold for less than par
- 11Bond DiscountThe difference between selling price and par when the bond is sold for less than par
- 12Time Interest EarnedNet Income + Interest Expense+ Income Tax Expense/ Interest Expense
- 13Straight Line AmortizationA simplified method of amortizing a bond discount or premium that allocated an equal dollar amount to each interest period
- 14Effective Interest AmortizationA method of amortizing a bond discount or premium on the basis of the effective interest rate; it is the theoretically preferred method
- 15Debt to Equity RatioTotal Liabilities/ Stockholders' Equity
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- Flashcards on Accounting 201- Chapter 10, created by Andreana Buterakos on 02/12/2014.
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- Andreana Buterakos
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