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 is usually included in a bond's indenture?

The current market price of the bond

The credit rating assigned by rating agencies

The terms of repayment and interest payment schedule

The identity of all future bondholders

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Verified step by step guidance

Understand the concept of a bond indenture: A bond indenture is a legal document that outlines the terms and conditions of a bond agreement between the issuer and the bondholders. It serves as a contract and includes key details about the bond.

Identify the key components typically included in a bond indenture: These components often include the terms of repayment, the interest payment schedule, the maturity date, the coupon rate, and any covenants or restrictions placed on the issuer.

Clarify what is not included in a bond indenture: The current market price of the bond and the credit rating assigned by rating agencies are external factors and are not part of the bond indenture. Similarly, the identity of future bondholders is not included, as bondholders can change over time.

Focus on the correct answer: The terms of repayment and interest payment schedule are essential components of a bond indenture because they define how and when the issuer will repay the bondholders and pay interest.

Review the purpose of a bond indenture: It ensures transparency and protects the rights of both the issuer and the bondholders by clearly outlining the obligations and expectations of each party.