FINANCIAL AND MANAGERIAL ACCTG W/ACC CRD
9th Edition
ISBN: 9781266515071
Author: Wild
Publisher: MCG CUSTOM
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Chapter 10, Problem 17QS
To determine
Introduction: A corporate or governmental body may issue bonds to investors as a fixed obligation to pay. Bonds are a way to raise money for infrastructural or operational projects. Bonds are typically repaid as of the bond's maturity date and typically contain a periodic coupon payment.
To Match: The bonds features with the terminology.
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Select the description that best fits each term or phrase. A. Records and tracks the bondholders’ names. B. Is unsecured; backed only by the issuer’s credit standing. C. Has varying maturity dates for amounts owed. D. The legal contract between the issuer and the bondholders. E. Can be exchanged for shares of the issuer’s stock. F. Is unregistered; interest is paid to whoever possesses them. G. Maintains a separate asset account from which bondholders are paid at maturity. H. Pledges specific assets of the issuer as collateral. 1. Registered bond 5. Convertible bond 2. Serial bond 6. Bond indenture 3. Secured bond 7. Sinking fund bond 4. Bearer bond 8. Debenture
To be effective issuing and investing in bonds, knowledge of their terminology, characteristics, and features is essential.
For example:
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A bond’s refers to the interest payment or payments paid by a bond.
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A bond issuer is said to be in if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issue’s restrictive covenants.
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The contract that describes the terms of a borrowing arrangement between a firm that sells a bond issue and the investors who purchase the bonds is called .
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A bond’s gives the issuer the right to call, or redeem, a bond at specific times and under specific conditions.
Suppose you read an article about the Golden Gate Bridge and Highway District bonds. It includes the following information:
Bridge Bonds Series A Dated 7-15-2005 4.375% Due 7-15-2055 @100.00
What is the issuing date of this bond?
7-15-2005
7-15-2055…
The document that shows a bondholders' purchase of bonds, the par value of the bonds, stated interest rate, and maturity date is known as a:
Group of answer choices
receipt of purchase
memorandum
stock certificate
bond certificate
Chapter 10 Solutions
FINANCIAL AND MANAGERIAL ACCTG W/ACC CRD
Ch. 10 - Prob. 1QSCh. 10 - Prob. 2QSCh. 10 - Prob. 3QSCh. 10 - Prob. 4QSCh. 10 - Prob. 5QSCh. 10 - Prob. 6QSCh. 10 - Prob. 7QSCh. 10 - Prob. 8QSCh. 10 - Prob. 9QSCh. 10 - Prob. 10QS
Ch. 10 - Prob. 11QSCh. 10 - Prob. 12QSCh. 10 - Prob. 13QSCh. 10 - Prob. 14QSCh. 10 - Prob. 15QSCh. 10 - Prob. 16QSCh. 10 - Prob. 17QSCh. 10 - Prob. 18QSCh. 10 - Prob. 19QSCh. 10 - Prob. 20QSCh. 10 - Prob. 21QSCh. 10 - Prob. 22QSCh. 10 - Prob. 23QSCh. 10 - Prob. 24QSCh. 10 - Prob. 1ECh. 10 - Prob. 2ECh. 10 - Prob. 3ECh. 10 - Prob. 4ECh. 10 - Prob. 5ECh. 10 - Prob. 6ECh. 10 - Prob. 7ECh. 10 - Prob. 8ECh. 10 - Prob. 9ECh. 10 - Prob. 10ECh. 10 - Prob. 11ECh. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Prob. 15ECh. 10 - Prob. 16ECh. 10 - Prob. 17ECh. 10 - Prob. 18ECh. 10 - Prob. 19ECh. 10 - Prob. 20ECh. 10 - Prob. 21ECh. 10 - Prob. 22ECh. 10 - Prob. 23ECh. 10 - Prob. 1PSACh. 10 - Prob. 2PSACh. 10 - Prob. 3PSACh. 10 - Prob. 4PSACh. 10 - Prob. 5PSACh. 10 - Prob. 6PSACh. 10 - Prob. 7PSACh. 10 - Prob. 8PSACh. 10 - Prob. 9PSACh. 10 - Prob. 10PSACh. 10 - Prob. 11PSACh. 10 - Prob. 12PSACh. 10 - Prob. 13PSACh. 10 - Prob. 1PSBCh. 10 - Prob. 2PSBCh. 10 - Prob. 3PSBCh. 10 - Prob. 4PSBCh. 10 - Prob. 5PSBCh. 10 - Prob. 6PSBCh. 10 - Prob. 7PSBCh. 10 - Prob. 8PSBCh. 10 - Prob. 9PSBCh. 10 - Prob. 10PSBCh. 10 - Problem 10-10BB Effective Interest: Amortization...Ch. 10 - Prob. 12PSBCh. 10 - Prob. 13PSBCh. 10 - Prob. 10SPCh. 10 - Prob. 1.1AACh. 10 - Prob. 1.2AACh. 10 - Prob. 1.3AACh. 10 - Prob. 2.1AACh. 10 - Prob. 2.2AACh. 10 - Prob. 2.3AACh. 10 - Prob. 3.1AACh. 10 - Prob. 3.2AACh. 10 - Prob. 3.3AACh. 10 - Prob. 1DQCh. 10 - Prob. 2DQCh. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - Prob. 5DQCh. 10 - Prob. 6DQCh. 10 - Prob. 7DQCh. 10 - Prob. 8DQCh. 10 - Prob. 9DQCh. 10 - What is the issue price of a $2,000 bond sold at...Ch. 10 - Prob. 11DQCh. 10 - Prob. 12DQCh. 10 - Prob. 13DQCh. 10 - Prob. 14DQCh. 10 - Prob. 15DQCh. 10 - Prob. 1BTNCh. 10 - Prob. 2BTNCh. 10 - Prob. 3BTNCh. 10 - Prob. 4BTN
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Similar questions
- More on types of bonds You can distinguish the various types of bonds by their terms of contract, pledge of collateral, and so on. Identify the type of bond based on each description given in the table that follows: Description Type of Bond These bonds are collateralized securities with first claims in the event of bankruptcy. Senior mortgage bonds,subordinate debentures, Junior Mortgage Bonds These bonds are not backed by any physical collateral. They are backed by the reputation and creditworthiness of the issuing company. Same as the above answer choices These bonds are considered the riskiest of all corporate bonds and thus offer the highest interest rates. Same as the above answer choices Based on your understanding of bond ratings and bond-rating criteria, which of the following statements is true? An indenture is a legal document that details the rights of bondholders. If the indenture includes a sinking funds provision, the bond…arrow_forwardIn terms of public offerings of bonds, what is an indenture? A) a list of the duties of a trust company representing the bondholders' interests B) a memorandum that must be produced to describe the details of a bond offering C) a formal contract that specifies a firm's obligations to the bondholders D) a schedule of the fees charged by an underwriting companyarrow_forwardA legal document that details the rights of bondholders and the issuer is called . If the legal document just described includes a sinking fund provision, is the bond considered to have more or less default risk, all else being equal? More default risk Less default risk You can distinguish the various types of bonds by their terms of contract, pledge of collateral, and so on. Identify the type of bond based on each description given in the table that follows: Description Type of Bond These bonds are backed by real estate holdings and equipment, and if a company goes bankrupt, the collateral can be sold off to compensate for the default. These bonds, more so than other collateralized securities, have prior claims over assets. These bonds are not backed by any physical collateral. They are backed by the reputation and creditworthiness of the issuing company. These bonds are considered the riskiest of all corporate bonds and thus…arrow_forward
- Bearer bonds are bonds A-with coupons attached that are redeemable by whoever has the bond B-where the registered owner automatically receives bond payments when scheduled C-in which the issue matures on a series of dates. D-issued in another currency other than the bond issuer's home currency.arrow_forwardA debenture is ________. Group of answer choices A. a bond with assets such as land to back their word that they will pay it back B. the interest paid on a bond C. a type of bond that can be sold back to the issuing company whenever the bondholder wishes D. a bond with only the company's word that they will pay it backarrow_forwardWhich one of the following statements is correct concerning bond classifications? Select one: a. A mortgage security is a bond issued solely by a home builder. b. A note is a bond which has an original maturity date longer than 10 years. c. A debenture is a long-term bond secured by the fixed assets of a firm. d. A callable bond can be repurchased by the issuer prior to the initial maturity date. e. A subordinated bond receives preferential treatment over all other bonds in a bankruptcy.arrow_forward
- The agreements and other terms of the contract between the issuer of the bonds and the one that lends the funds are established in: The surety contracts (bond indenture). Bond obligations (bond debenture). Registered bonds. Voucher coupon.arrow_forwardWhich of the following statements relating to bonds is incorrect? A. A bond’s face value is the amount the issuer must pay to the bondholder at maturity. B. The owner of a registered bond is the person to whom interest payments are mailed. C. A bond will typically sell at a discount when its nominal rate is less than the current market rate of interest. D. A bond is a debt instrument giving the issuer flexibility as to maturity date.arrow_forwardOn the maturity date of a bond investment, the journal entry includes ________. A. a debit to Cash and a credit to Held-to-Maturity Debt Investments B. a debit to the Interest Revenue and a credit to Cash C. recording a gain or loss on disposition at maturity D. a debit to Long-term Investments and a credit to Casharrow_forward
- Bond (Held-to-Maturity)Investment Journalize the entries to record the following selected bond investment transactions for Marr Products: If an amount box does not require an entry, leave it blank. D.) Received face value of remaining bonds at their maturity. Cash- Investments- Hotline Inc. Bonds- I just need help with part D, Thanks!arrow_forwardThe effective rate of interest on bonds is the interest rate specified on the bond certificate. is the market rate of interest when the bonds are actually sold. is the market rate of interest on the date of public announcement. none of these choices.arrow_forwardInitially, bond ratings were paid for by the bond purchaser. Today bonding ratings are under an “issuer pays” model. Explain how the two forms are different.arrow_forward
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