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Bond Terms
Bond terms from chapter 10
18
Accounting
Undergraduate 1
12/12/2010

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Term
Bond premium
Definition
Occurs when bonds are sold at more than face value
Term
Market interest rate
Definition
Rate of interest that will vary depending on economic conditions
Term
convertible bonds
Definition
Bonds that may be exchanged for common stock
Term
coupon bonds
Definition
Bonds that are not registered
Term
term bonds
Definition
A bond issue in which all bonds are due on the same date
Term
bond discount
Definition
Occurs when bonds are sold at less than face value
Term
face interest rate
Definition
Rate of interest that will be paid regardless of market conditions
Term
callable bonds
Definition
Bonds that may be retired at management’s option
Term
callable bonds
Definition
Bonds that may be retired at management’s option
Term
Bond certificate
Definition
A document that is evidence of a company’s debt
Term
Effective Interest Rate
Definition
Same as market rate of Interest
Term
registered bonds
Definition
Bonds for which the company knows who owns them
Term
serial bonds
Definition
A bond issue for which bonds are due at different dates
Term
bond issue
Definition
The total value of bonds issued at one time
Term
secured bonds
Definition
Bonds whose payment involves a pledge of certain assets
Term
unsecured bonds
Definition
Same as debenture bonds
Term
Bond indenture
Definition
Contains the terms of the bond issue
Term
debenture bonds
Definition
Bonds issued on the general credit of the company
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