How are bonds amortized?

Q: What factors affect the market rates for bonds?

A: In general, the supply of and demand for bonds affect market rates. The market rate for particular…

Q: What is the cost of a long-term investment in bonds?

A: Bond: Bonds are long-term debt issued with the defined terms and conditions. Bonds are generally…

Q: Who Issues Bonds?

A: A bond is a fixed income instrument. The bond holders are referred to as the debt holders or…

Q: When should debt security be classified as held-to-maturity?

A: Debt: A debt security should be classified as held to maturity only if the company has both the…

Q: Why consider bonds?

A: A bond can be described as the security or asset which provides secure income to the investor…

Q: Difference between regular bond and perpetuity bond?

A: Debt markets are markets where you contribute within the institutions or trade substances by the…

Q: What are advantages of debt financing?

A: The advantage of debt financing: Ownership remains with the person itself as when the person agrees…

Q: What is the difference between general obligation bonds and revenue bonds?

A: General Obligation Bonds(GOs) are bonds that are backed by the "full faith and credit" of the issuer…

Q: What are Bond prices and interest rates? And what is the relationship between them?

A: Bond is a debt instrument which provides regular periodic interest income to an investor. Generally,…

Q: What is meant by a bond indenture?

A: A Bond refers to an instrument that represents the loan being made by the investor to the company…

Q: How do interest rates affect bond valuations? What are the key assumptions in valuing a bond?

A: Bonds are the form of debt payable by the company. Interest rates on bonds to be paid is coupon…

Q: The amortization on a bond premium:

A: The amortization on a bond premium: (d) Is calculated by multiplying the bond’s carrying value by…

Q: What is a debt security?

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: What are the contract rate and the market rate for bonds?

A:

Q: Why is the discount and premium on bond issues amortized?

A: The bonds can be issued at premium or discount on the basis of market rate of similar bonds.

Q: How do we calculate the issue price of bonds? Is it equal to the present value of the principal?…

A:

Q: What are the risks of debt securities?

A: Debt securities: Debt securities can be described as a type of debt instrument that is purchased and…

Q: What is the meaning of contemporary bonds

A: If enough funds are not available with the firm, in that case it can have funds from outside. These…

Q: What is a bond payable?

A: Long-Term LiabilitiesLong-term liabilities are the obligations of the business that need not be paid…

Q: What is a term bond?

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: What amount of interest is expensed on a bond interest payment?

A: Whenever an interest payment is made on bonds, amount of interest expensed : Interest expensed =…

Q: what is difference between a bond and a term loan? what are the advantages of a term loan over a…

A: A bond is a fixed-income security that speaks to credit to a borrower (normally corporate or…

Q: What is outstanding bond?

A: Bond: It can be defined as the loan given to a business or any other organization by the investor…

Q: What are convertible bonds? Which recording method is used?

A: Bonds: Bonds are a kind of interest-bearing notes payable, usually issued by companies,…

Q: Why is it necessary to amortize the discount and premium on bond issues?

A: Introduction:   Bonds may be sold at a discount, at a premium, or at face value.

Q: What are bond issue costs? What is an underwriter?

A: Bonds: Bonds are a kind of interest bearing notes payable, usually issued by companies, universities…

Q: Why discount and premium on issue of bonds is amortized?

A: Bonds are intangible assets, the amortization is similar to depreciation, it means systematically…

Q: What does it mean to amortize a bond premium or discount? Why is it necessary?

A: Introduction: A bond is a contract between the bond lender and the bondholders. The two most common…

Q: What is general obligation bonds?

A: Bonds: A bond, also recognized as a fixed-income security, is a debt instrument shaped for the…

Q: How are bonds and notes the same? How do they differ?

A:

Q: what are treasury-indexed bonds?

A: Treasury Indexed Bonds are medium to long term securities for which the security's capital worth is…

Q: How does collateral affect the interest rate on a bond? How does subordination affect the interest…

A: The interest rate on a bond is affected by many factors like collateral, subordination, etc.

Q: What is the straight-line amortization approach with regards to a bond discount or premium?

A: Bond with a straight-line amortization schedule: The straight-line amortization technique is a way…

Q: When does a premium on bonds payable occur?

A: Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various…

Q: Explain Collateralized Debt Obligations (CDOs)?

A: A collateralized debt obligation (CDO) is a complex structured finance product that is backed by a…

Q: What are the two ways that discount and premium on bonds due are amortized? Each one should be…

A: Solution Two ways that discount and premiums on bond are amortized are as flows Straight line method…

Q: What is premium on bonds payable?

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: What are the Pro's and con's of bonds?

A: The bonds are one of the most liquid and active financial instruments in the world. Bonds are…

Q: How does equity valuation differ from bond valuation

A: The term equity valuation refers to all the methods and techniques used by the investors to compute…

Q: How do premiums and discounts on long-term debt securities affect interest expense?

A: Long term debts are used by the large organisations to raise the fund and utilise them for various…

Q: What are redeemable and irredeemable bonds? Explain in single sentence please

A: Redeemable bonds are the bonds which are redeemed after fixed no. of years.

Q: Are bonds considered as fixed income securities?

A: Bonds are a type of loan taken by the borrower that promises to pay a certain sum as an interest to…

Q: What is the effective-interest amortization mechanism for a bond discount or premium?

A: Method of interest amortization that is effective: Interest expenditure is calculated as follows:…

Q: What are the methods of determining interest on bonds?

A: Bonds:   Bonds are long-term promissory notes that are represented by a company while borrowing…

Q: Why is the maturity of some bonds ambiguous?

A: A bond is a fixed-income financial product that simulates a loan from an investor to a borrower.…