ACCT 3340 Lecture Notes - Lecture 14: Interest Bearing Note, Cash Flow, Accrued Interest
21 Dec 2015
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Purpose of bonds is to borrow for the long term when the amount of capital that is needed is too large for one lender to supply. Bond indenture: a contract used to create a bond and represents a promise to pay both of the following: A sum of money at a designated maturity date. Periodic interest at a specified rate on the maturity amount (face o o. Entire bond issue may be sold to an investment banker who acts as a selling value) agent and markets the bonds. Investment banker may underwrite entire issue by guaranteeing a certain sum to the corporation (firm underwriting) Or sell the bond issue for a commission that will be deducted from the o. Bond issue privately by selling bonds directly to a large institution (private proceeds of the sale (best efforts underwriting) placement) Types o o o o o o o o o o.
