Chapter 12_Manegerial Accounting

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A 1000 bond "d at 98 to be purchased or sold for ...

$980

A bond is

A form of an interest-bearing note

Convertible Bond

Allows shareholders to exchange bond for shares of company stock.AK bonds that may be exchanged for other securities such as common stock.

Any on amortized discount is reported as what?

Any an amortized discount as reported as a deduction to the face amount of the bonds.

What is not an advantage of issuing bonds instead of common stock?

Earnings per share on common stock are always lower.

The portion of bonds or notes payable that is due within one year is reported as what?

It is recorded as a current liability on the balance sheet.

Any on amortized premium is reported as what?

It is reported as an addition to the face amount of the bonds.

What is one potential advantage of financing corporations through the use of bonds rather than common stock?

The interest expense is deductible for tax purposes by the corporation. AKA deductibility of interest is a primary benefit of bond financing.

Bond Indenture

The underlying contract between an issuing corporation and the bondholders


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