Reporting and Interpreting Bonds Notes.pdf

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Department
Accounting
Course
ACCT 1201
Professor
Ganesh Krishnamoorthy
Semester
Spring

Description
Accounting Chapter 10 Notes BondsAdvantagesstockholders maintain control bc bonds are debt not equityinterest expense is tax deductibleimpact on earnings is positive because money can be borrowed at a low interest rate and invested at a higher rate Disadvantagesrisk of bankruptcy exists because interest and debt must be paid as scheduled or creditors will force legal actionnegative impact on cash flows exists because interest and principal must be repaid in the futureBonds PayableFace Value Maturity or Par Value PrincipalMaturity DateStated Interest Rateinterest rate applied to the bonds face valueInterest Payment Datesalso known as Coupon PaymentBond DateIndenturea bond contract that specifies the legal provisions of a bond issue Unsecured debenture bondsno assets are
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