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

By the end of a bond's maturity, the investor will have received:

the face value of the bond plus all interest payments due

the market value of the bond at maturity

only the face value of the bond, with no interest payments

only the interest payments, but not the face value

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Verified step by step guidance

Understand the concept of a bond: A bond is a fixed-income instrument that represents a loan made by an investor to a borrower. Bonds typically pay periodic interest (coupon payments) and return the face value (principal) at maturity.

Identify the components of a bond's cash flows: Bonds provide two types of payments to investors—periodic interest payments (coupon payments) and the repayment of the face value (principal) at maturity.

Clarify the term 'face value': The face value is the amount the bond issuer agrees to repay the investor at the end of the bond's term. It is also known as the principal amount.

Explain the interest payments: Interest payments are periodic payments made to the bondholder based on the bond's coupon rate. These payments are typically made semi-annually or annually until the bond matures.

Combine the components: At the end of the bond's maturity, the investor will receive the face value of the bond plus all interest payments that were due during the bond's term. This is the total return to the investor from holding the bond until maturity.