Accounting Tools

APRIL 24, 2024

What is a Registered Bond? A registered bond is a bond for which the issuing entity maintains a list of the owners and the interest paid. A registered bond may state the name of its owner on its face, and is only transferable with the owner's endorsement.

Corporate Finance 40

Corporate Finance Collections 40

Accounting Tools

MAY 7, 2024

What is a Bond Amortization Schedule? A bond amortization schedule is a table that shows the amount of interest expense , interest payment, and discount or premium amortization of a bond in each successive period. The table is commonly used by the issuers of bonds to assist them in accounting for these instruments over time.

Corporate Finance 40

Corporate Finance Accounting Accounting 40

Accounting Tools

MARCH 25, 2024

What is Bond Retirement? A bond retirement occurs when an organization repurchases bonds that it had previously issued to investors. There are three scenarios in which a bond retirement can occur, which are as follows: Maturity date arrives. Issuer calls the bonds. Investors convert the bonds.

Corporate Finance 40

Corporate Finance Accounting Accounting 40

Accounting Tools

MARCH 26, 2024

What is Bonds Payable? Bonds payable is a liability account that contains the amount owed to bond holders by the issuer. The account balance increases when an organization sells bonds to investors, and declines when the issuer redeems them. Bonds are typically issued by larger corporations and governments.

Accounting 40

Accounting Accounting 40

Accounting Tools

APRIL 17, 2024

What is the Amortization of Premium on Bonds Payable? When a company issues bonds , investors may pay more than the face value of the bonds when the stated interest rate on the bonds exceeds the market interest rate. The bonds have a term of five years, so that is the period over which ABC must amortize the premium.

Corporate Finance 40

Corporate Finance Accounting Accounting 40

Accounting Tools

APRIL 29, 2024

How to Calculate Simple Yield for a Bond To calculate the simple yield on a bond, divide the total amount of annual interest payments from the issuer by the current market price of the bond. This measure also does not account for any realized or unrealized gains or losses on these investments.

Corporate Finance 40

Corporate Finance Accounting Accounting Financial Analysis 40

Accounting Tools

APRIL 28, 2024

A sinking fund is a set-aside of cash that is to be used at a later date to retire bonds or other forms of debt or preferred stock. Related AccountingTools Courses Accounting for Bonds Corporate Finance Treasurer’s Guidebook Related Articles Bond Retirement Maturity Date Retirement of Bonds

Corporate Finance 40

Corporate Finance Accounting Accounting 40

Accounting Tools

JUNE 21, 2023

Related Courses Accounting for Investments Corporate Finance GAAP Guidebook The issue price of a bond is based on the relationship between the interest rate that the bond pays and the market interest rate being paid on the same date. Determine the Interest Paid by the Bond The first step is to determine the interest paid.

Corporate Finance 75

Corporate Finance Accounting Accounting 75

Accounting Tools

APRIL 7, 2024

Example of Issuance Costs Alfred Corporation’s board of directors decides to issue bonds to raise capital for a new production facility. This involves hiring an investment banker, who charges a 3% underwriting fee on the $5 million of bonds that the board wants to issue. The company then issues the bonds to investors.

Financial Statements 40

Financial Statements Corporate Finance Auditing 40

Accounting Tools

MARCH 8, 2024

A call premium is the excess amount over the par value of a bond that the issuer is willing to pay in order to redeem a bond before its maturity date. The call premium is stated as a specific monetary value over a bond’s par value, rather than a percentage amount.

Corporate Finance 40

Corporate Finance Accounting Accounting 40

Accounting Tools

APRIL 7, 2024

Bonds payable. The remaining principal balance on bonds outstanding that is due for payment in more than one year. One of the few examples of a contra liability account is the discount on bonds payable (or notes payable) account. These are due for settlement in more than one year, and almost always involve long-term borrowings.

General Ledger 75

General Ledger Payroll Deposits Invoicing 75

Accounting Tools

FEBRUARY 5, 2024

What is a Collateral Trust Bond? A collateral trust bond is a bond that is secured by the issuer 's own security investments. These investments are deposited with a trustee, who holds them on behalf of the bond holders.

Corporate Finance 40

Corporate Finance Deposits 40

Accounting Tools

MARCH 29, 2024

Face Value of a Bond A common application of the face value term is in regard to the face value of a bond. This is the amount payable, as stated on the bond certificate. A typical bond face value is $1,000. The face value of a bond may also be known as its par value.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

FEBRUARY 10, 2024

What is a Bond? A bond is a fixed obligation to pay that is issued by a corporation or government entity to investors. Bonds are used to raise cash for operational or infrastructure projects. Bonds usually include a periodic coupon payment, and are paid off as of a specific maturity date.

Corporate Finance 40

Corporate Finance Accounting Accounting 40

Accounting Tools

MAY 3, 2024

Contingent convertible bonds. A business may issue bonds that can be converted into its common stock under conditions specified in the bond indenture agreement. Warrants are sometimes given to investors as an inducement for them to purchase a company’s securities. Contingent share issuances.

CPA 40

CPA 40

Accounting Tools

JANUARY 30, 2024

What is a Floorless Bond? A floorless bond is a bond whose terms allow purchasers to convert them to common stock , as well as any accrued interest. Terms Similar to Floorless Bond A floorless bond is also known as a toxic convertible bond or a death spiral convertible bond.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

JANUARY 24, 2024

What is a Deep Discount Bond? A deep discount bond is a bond that is trading at a substantial discount from its face value. One reason for the deep discount is that the stated interest rate on the bond is well below the current market rate.

Corporate Finance 40

Corporate Finance Accounting Accounting 40

Accounting Tools

MARCH 11, 2024

Example of an Adjunct Account The most common example of an adjunct account is the unamortized bond premium account, which is used when a business sells bonds at a premium. The unamortized bond premium and the bond liability, when combined, represent the actual liability of the bond issuer.

Accounting 40

Accounting Accounting 40

Accounting Tools

MARCH 8, 2024

A contractual interest rate is the specific rate included within the terms of a note payable or bond payable. This rate is multiplied by the face amount of the note or bond to derive the amount of interest actually paid to a note or bond holder. What is a Contractual Interest Rate?

Corporate Finance 40

Corporate Finance Accounting Accounting 40

Accounting Tools

MAY 16, 2024

Related AccountingTools Courses Corporate Cash Management Investing Guidebook Treasurer's Guidebook Related Articles Treasury Bill Treasury Bond Treasury Certificate Treasury notes are quite popular as investments, since the secondary market is active, and the U.S. government is considered to be a very safe issuer of securities.

Billing 40

Billing 40

Accounting Tools

FEBRUARY 15, 2024

Advantages of Issuing Bonds A corporation has a choice of raising money by selling shares or by issuing bonds. The issuance of bonds essentially creates a loan between a group of investors and the corporation. There are specific reasons why the issuance of bonds is a better choice than issuing shares.

Corporate Finance 40

Corporate Finance Tax Accounting Accounting 40

Accounting Tools

OCTOBER 15, 2023

Related Courses Accounting for Bonds Accounting for Investments Corporate Finance What is a Bond Call Price? A bond call price is the contractually-mandated price at which a bond holder must sell a bond back to the issuer. Outside of this date range, the issuer cannot buy back its bonds.

Corporate Finance 40

Corporate Finance Accounting Accounting 40

Accounting Tools

FEBRUARY 15, 2024

For example, if an investor buys a bond for $1,000 and also pays a $25 commission and taxes of $10, then the eventual return on this investment should be based on a total cost of $1,035, not just the $1,000 cost of the bond. All of these costs should be considered when deriving the return on investment.

Cost Accounting 72

Cost Accounting Financial Reporting Budgeting Tax 72

Accounting Tools

DECEMBER 26, 2023

What is a Bond? A bond is a fixed obligation to pay that is issued by a corporation or government entity to investors. The issuer is obligated to make a series of interest payments to the bond holders over the life of the bond, and to buy back the bonds at their maturity date. This is a form of debt for the issuer.

Corporate Finance 40

Corporate Finance Computation Accounting Accounting 40

Accounting Tools

MAY 15, 2024

Other offering costs cover the printing of prospectuses , exchange listing fees, registration fees, and initial credit rating agency fees (if an offering involves the sale of bonds ). Offering costs can be so substantial that they make it impossible for a smaller entity to issue securities.

Corporate Finance 40

Corporate Finance Accounting Accounting 40

Accounting Tools

DECEMBER 22, 2023

What is an Unamortized Bond Discount? An unamortized bond discount refers to the accounting applied to a bond sold below its face amount. By paying less, investors are effectively increasing their return on investment when they are paid interest by the bond issuer. The amount written off is charged to interest expense.

Corporate Finance 40

Corporate Finance Financial Statements Accounting Accounting 40

Accounting Tools

NOVEMBER 4, 2023

Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is an Income Bond? An income bond is a bond that pays interest only if the issuing entity has earned income. The interest paid by this type of bond can be tied to total entity earnings or to specific projects.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

SEPTEMBER 1, 2023

Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is a Debenture Bond? A debenture bond is a bond that is not secured by any assets of the issuer. Instead, the bond is only backed by the reputation and integrity of the issuer. Who Issues Debenture Bonds?

Corporate Finance 40

Corporate Finance 40

Accounting Tools

OCTOBER 9, 2023

Related Courses Accounting for Bonds Accountants’ Guidebook What is the Discount on Bonds Payable? The discount on bonds payable is the difference between the face amount of a bond and the reduced price at which it was sold by the issuer. In this case, the discount on bonds payable is $50,000.

Accounting 40

Accounting Accounting 40

Accounting Tools

AUGUST 27, 2023

Related Courses Accounting for Bonds Accounting for Investments Corporate Finance What is a Coupon Bond? A coupon bond has interest coupons that the bond holder sends to the issuing entity or its paying agent on the dates when interest payments are due. That is, the bond holder is presumed to be its owner.

Corporate Finance 40

Corporate Finance Accounting Accounting 40

Accounting Tools

OCTOBER 23, 2023

Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is a Bond Indenture? A bond indenture is the contract associated with a bond. The bond indenture is the core legal document referenced by the bond issuer and investors when there is a dispute regarding bonds.

Corporate Finance 40

Corporate Finance Accounting Accounting 40

Accounting Tools

OCTOBER 4, 2023

Related Courses Accounting for Bonds Accounting for Investments Corporate Finance What is a Par Bond? A par bond is a bond that sells at its exact face value. This typically means that a bond sells for $1,000, since this is the face value of most bonds.

Corporate Finance 40

Corporate Finance Accounting Accounting 40

Accounting Tools

OCTOBER 26, 2023

Related Courses Accounting for Bonds Accounting for Investments Corporate Finance The carrying value of a bond is that amount stated on the issuing entity's balance sheet. Carrying value is the combined total of a bond’s face value and any unamortized discounts or premiums.

Corporate Finance 40

Corporate Finance Accounting Accounting 40

Accounting Tools

OCTOBER 14, 2023

Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is a Secured Bond? A secured bond is a debt instrument that is backed by collateral. If the issuer defaults on bond payments, this means that title to the underlying assets will be passed to the bond holders.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

OCTOBER 14, 2023

Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is a Serial Bond? A serial bond is a bond issuance where a portion of the total number of bonds are paid off each year. For example, a $1,000,000, ten-year serial bond will have $100,000 of bonds mature once a year for ten years.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

OCTOBER 15, 2023

Related Courses Accounting for Bonds Accounting for Investments Corporate Finance What is a Bond Certificate? A bond certificate is a legal document describing the indebtedness of a borrower and the terms under which that indebtedness will be paid back to the investor.

Corporate Finance 40

Corporate Finance Accounting Accounting 40

Accounting Tools

SEPTEMBER 25, 2023

Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is a Callable Bond? A callable bond is a bond that can be redeemed by its issuer before the maturity date. The call premium may be higher if a bond is redeemed quite early, and declines if the redemption occurs later.

Corporate Finance 40

Corporate Finance 40