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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Describe the two distinct obligations incurred by a corporation when issuing bonds.

To determine

Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

To Describe: The two distinct obligations incurred by a corporation, when bonds are issued.

Explanation

Two distinct obligations incurred by a corporation, when bonds are issued as follows:

  • Interest payment at a specified rate due on periodic basis (Annually, semi-annually, or quarterly),
  • The principal amount which must be paid at the time of maturity of the bond

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