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

A mortgage bond is a corporate bond secured by which of the following?

Future earnings of the issuing corporation

Specific assets of the issuing corporation, such as real estate

Shares of stock held by the issuing corporation

The general credit of the issuing corporation without any collateral

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Verified step by step guidance

Understand the concept of a mortgage bond: A mortgage bond is a type of corporate bond that is secured by specific assets of the issuing corporation, typically real estate or other tangible assets. This means that if the corporation defaults on its bond payments, the bondholders have a claim on these specific assets.

Review the options provided in the question: The options include future earnings, specific assets, shares of stock, and general credit without collateral. Each option represents a different type of security or backing for a bond.

Eliminate incorrect options: Future earnings are not a tangible asset and cannot be used as collateral for a mortgage bond. Shares of stock held by the issuing corporation are not typically used to secure mortgage bonds. General credit without collateral refers to unsecured bonds, not mortgage bonds.

Focus on the correct option: Mortgage bonds are secured by specific assets of the issuing corporation, such as real estate. This is the defining characteristic of a mortgage bond and distinguishes it from other types of bonds.

Conclude the explanation: The correct answer is 'Specific assets of the issuing corporation, such as real estate,' because these assets serve as collateral for the bond, providing security to bondholders in case of default.