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

The legal contract between the bondholders and the issuer is called the bond:

indenture

coupon

prospectus

debenture

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Verified step by step guidance

Understand the key terms related to bonds: A bond is a fixed-income instrument representing a loan made by an investor to a borrower. The legal contract between the bondholders and the issuer outlines the terms and conditions of the bond.

Learn the definition of 'indenture': An indenture is a formal legal agreement between the bond issuer and the bondholders. It specifies the terms of the bond, including the interest rate, maturity date, and any covenants or restrictions.

Differentiate between the other options: 'Coupon' refers to the periodic interest payment made to bondholders, 'Prospectus' is a document that provides details about the investment offering, and 'Debenture' is a type of unsecured bond backed only by the issuer's creditworthiness.

Recognize that the correct answer is 'indenture' because it is the legal contract that governs the relationship between the bondholders and the issuer.

Review the importance of the indenture: It ensures transparency and protects the rights of both parties by clearly defining the obligations and expectations associated with the bond issuance.