Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

11. Long Term Liabilities

Introduction to Bonds and Bond Characteristics

Financial Accounting

11. Long Term Liabilities

Introduction to Bonds and Bond Characteristics

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Multiple Choice

Which of the following statements about bonds is correct?

Bondholders have ownership rights in the issuing company.

The interest paid on bonds is called a dividend.

Bonds are long-term debt instruments issued by corporations or governments to raise capital.

Bonds do not have a maturity date.

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Verified step by step guidance

Understand the concept of bonds: Bonds are long-term debt instruments issued by corporations or governments to raise capital. They represent a loan made by the bondholder to the issuer, and the issuer agrees to pay back the principal amount along with periodic interest payments.

Clarify ownership rights: Bondholders do not have ownership rights in the issuing company. Unlike shareholders, bondholders are creditors, not owners.

Explain interest payments: The interest paid on bonds is not called a dividend. Dividends are payments made to shareholders from a company's profits, whereas bond interest is a fixed payment agreed upon in the bond contract.

Discuss maturity dates: Bonds typically have a maturity date, which is the date when the issuer repays the principal amount to the bondholder. Bonds without a maturity date are rare and are usually referred to as perpetual bonds.

Identify the correct statement: Based on the explanations above, the correct statement is that bonds are long-term debt instruments issued by corporations or governments to raise capital.