ACCT1210 - CH.15

also called the maturity or par or face value - amount the borrower must pay back to the bondholders at maturity

• principal value

• maturity date

• coupon rate

the interest rate that the issuer will pay the bondholder and the dates that the interest payments are due (generally twice a year)

• principal value

• maturity date

• coupon rate

the date on which the borrower must pay the principal amount to the lender

• principal value

• maturity date

• coupon rate

bonds that all mature at the same time.

For ex: a $10,000 bond will return $10,000 at the end of the term

• serial bonds

• debentures

• term bonds

• secured bonds

• bearer bonds

bonds that mature in instalments at regular intervals.

For ex: a $500,000, five-yr bond may mature in $100,000 annual instalments over a five-yr period

• serial bonds

• debentures

• term bonds

• secured bonds

• bearer bonds

bonds that give the bondholder the right to take specified assets of the issuer (called collateral) if the issuer defaults, that is fails to pay principal or interest. details of the collateral must be provided in the notes to the financial statements

• serial bonds

• debentures

• term bonds

• secured bonds

• bearer bonds

unsecured bonds that are backed only by the good faith of the issuer.

like, there are no rights to specific assets given

• serial bonds

• debentures

• term bonds

• secured bonds

• bearer bonds

bonds payable to the person that has possession of them. they are also called unregistered bonds.

• serial bonds

• debentures

• term bonds

• secured bonds

• bearer bonds

this determines the cash interest paid by the borrower

• market or effective rate

• stated or contract rate

this is the rate investors demand for lending their money

• market or effective rate

• stated or contract rate