The annuity is a series of identical cash payments to be received at fixed intervals.
What is a Bond?
The bond is a certificate of debt which bears interest for a long period of time.
What is a Bearer Bond?
A bearer bond is a bond that is not registered.
What is a Bond Indenture?
The bond indenture is the contract between a corporation issuing bonds and the bondholders. The indenture contains the face value of the bond, the contract interest rate, and the maturity date.
What is a Callable Bond?
A Callable bond is a bond subject to retirement at a stated dollar amount prior to maturity, at the option of the issuer.
What is Capital Lease?
A capital lease is a contractual arrangement that transfers substantially all the benefits and risks of ownership to the lessee, so that the lease is in effect a purchase of the property.
What is Carrying Amount?
The carrying amount is the balance of the bonds payable account (face amount of the bonds) less any unamortized discount or plus any unamortized premium.
What is a Contract Rate or Contractual Rate?
The contract rate is the periodic interest to be paid on the bonds that is identified in the bond indenture; it is expressed as a percentage of the face amount of the bond (e.g., 97, 98, and 104). Other names for contract rate are “coupon rate” and “stated rate.”
What is a Debenture Bond?
A debenture bond is an unsecured bond issued based on the excellent reputation of the issuer. Therefore, the bond issue doesn’t require the pledge of assets, treasury stock, or any other type of collateral.
What is a Discount?
The discount is the interest deducted from the maturity value of a note or the excess of the face amount of bonds over their issue price.
What is an Effective Interest Rate Method?
The effective interest rate method is the method of amortizing discounts and premiums that provides for a constant rate of interest on the carrying amount of the bonds at the beginning of each period; often called simply the “interest method.”
What is Face Value?
Face value is the amount of principal the issuer must pay at the maturity date of the bond.
What is Future Value?
The future value is the estimated worth in the future of an amount of cash on hand today invested at a fixed rate of interest.
What is Market Interest Rate?
The market interest rate is the rate investors demand for loaning funds to the corporation. The rate is fixed by the for forces of demand supply.
What is Operating Lease?
An operating lease is a contractual agreement that gives the lessee the right to use property (which belongs to the lessor) for a period of time. The title to the property remains with the lessor.
What is Premium?
The premium is the excess of the issue price of a stock over its par value or the excess of the issue price of bonds over their face amount.
What is Present Value?
The present value is the estimated worth today of an amount of cash to be received (or paid) in the future.
What is Present Value of an Annuity?
The present value of an annuity is the sum of the present values of a series of equal cash flows to be received at fixed intervals.
What is a Sinking Fund?
The sinking fund is a fund in which cash or assets are set aside for the purpose of paying the face amount of the bonds at maturity.
What is a Perpetuity?
A perpetuity is a bond that is issued without a maturity date.
Ch1 Accounting in Action
Ch2 Recording Process
Ch3 Adjusting the Accounts
Ch4 Completing the Accounting Cycle
Ch5 Merchandising Operations
Ch7 Accounting Information Systems
Ch8 Internal Control and Cash
Ch9 Accounting for Receivables
Ch10 PP&E, Natural Resources, and Intangible Assets
Ch11 Current Liabilities and Payroll
Ch14 Corporations:Dividends, RE
Ch15 Long Term Liabilities
Ch17 Statement of Cash Flows
Ch18 Financial Statement Analysis
Plato and Accounting
Luca Pacioli and DaVinci