Which costs are included in bond issuance costs? How are they recorded?

Q: What is indexed bond?

A: It is a bond with a interest rate which is connected to a index, for example, the bond market…

Q: What is Bond's interest income?

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: What impact do interest rates have on bond prices? What are the basic assumptions that go into…

A: This question explains about the fundamental assumptions that go into establishing the value of a…

Q: What is investment-grade bond?

A: Bond is a financial instrument. Issuer issues bond to raise the fund and payback the amount at the…

Q: What is the relationship between bond prices and interest rates? Describe the process of…

A: Bond price: The present discounted value of a bond's future cash flow is known as the bond price.…

Q: What factors affect the market rates for bonds?

A: In general, the supply of and demand for bonds affect market rates. The market rate for particular…

Q: Define bonds payable.

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: Who Issues Bonds?

A: A bond is a fixed income instrument. The bond holders are referred to as the debt holders or…

Q: What are the difference between debt and equity and explain how the bonds market operates.

A: Debt are instruments which are used to fund a company’s requirement. These instruments include bonds…

Q: What is the difference between general obligation bonds and revenue bonds?

A: General Obligation Bonds(GOs) are bonds that are backed by the "full faith and credit" of the issuer…

Q: What is meant by a bond indenture?

A: A Bond refers to an instrument that represents the loan being made by the investor to the company…

Q: How can we determine the amount of debt financing through bonds?

A: When the firm raises funds through the sale of its long-term or short-term debt instruments then…

Q: What are the contract rate and the market rate for bonds?

A:

Q: Why is the discount and premium on bond issues amortized?

A: The bonds can be issued at premium or discount on the basis of market rate of similar bonds.

Q: What is original issue discount (OID) bond?

A: It is the amount of difference between the amount due at maturity and purchase value. These bonds…

Q: What are income bonds and indexed bonds?

A: The income bond is a type of debt instrument wherein the borrower is relied upon to pay just the par…

Q: What is the carrying amount of a bond?

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: How is the price of a bond (or bond issuance) determined?

A: solution concept coupon rate of bond               The coupon rate of the bond is the stated…

Q: Explain face amount, discount, and premium relating to bond issuance.

A: Face value is also known as par value. Face amount of bond issuance is the amount on which coupon…

Q: What is a bond payable?

A: Long-Term LiabilitiesLong-term liabilities are the obligations of the business that need not be paid…

Q: When does a discount on bonds payable occur?

A: Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various…

Q: What amount of interest is expensed on a bond interest payment?

A: Whenever an interest payment is made on bonds, amount of interest expensed : Interest expensed =…

Q: What type of account is Premium on Bonds Payable? What is its normal balance? Is it added to or…

A: Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various…

Q: Why is it necessary to amortize the discount and premium on bond issues?

A: Introduction:   Bonds may be sold at a discount, at a premium, or at face value.

Q: What type of account is Discount on Bonds Payable? What is its normal balance? Is it added to or…

A: Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various…

Q: What are bond issue costs? What is an underwriter?

A: Bonds: Bonds are a kind of interest bearing notes payable, usually issued by companies, universities…

Q: Why discount and premium on issue of bonds is amortized?

A: Bonds are intangible assets, the amortization is similar to depreciation, it means systematically…

Q: What does it mean to amortize a bond premium or discount? Why is it necessary?

A: Introduction: A bond is a contract between the bond lender and the bondholders. The two most common…

Q: What is general obligation bonds?

A: Bonds: A bond, also recognized as a fixed-income security, is a debt instrument shaped for the…

Q: What information is contained in a bond indenture? What purpose does it serve?

A:

Q: what are treasury-indexed bonds?

A: Treasury Indexed Bonds are medium to long term securities for which the security's capital worth is…

Q: Why would we record a bond a premium or discount?

A: Bond is a type of debt security which is issued by the bond issuer at the time taking debt from bond…

Q: When does a premium on bonds payable occur?

A: Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various…

Q: How does accrued interest on a bond affect the purchase price?

A: Interest on bond is normally paid semi annually. When a bond is transferred in between these…

Q: Compute bond proceeds, amortizing premium by interest method, and interest expense

A:

Q: What are the different factors that affect the interest rates set by issuers of debt securities?

A: Debt securities seem to be financial assets which guarantee their holders interest payments in the…

Q: How do we compute for the Carrying Value beginning of a Bonds Payable? of a Notes Payable? Are there…

A: The carrying value (or "book value") of the bond at a given point in time is its face value minus…

Q: What is premium on bonds payable?

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: What is a registered bond?

A: Bonds are basically the corporate debt units which are generally issued by companies that are…

Q: How do premiums and discounts on long-term debt securities affect interest expense?

A: Long term debts are used by the large organisations to raise the fund and utilise them for various…

Q: What is bond valuation? Give a detail explantion.

A: Answer

Q: How is the purchase of held-to-maturity debt security at face value recorded?

A: Hold-to-maturity Debt:  These are the investment in debt securities, where the investor wishes to…

Q: Are bonds considered as fixed income securities?

A: Bonds are a type of loan taken by the borrower that promises to pay a certain sum as an interest to…

Q: What is the purpose of bond indenture?

A: Bonds:   Bonds are long-term promissory notes that are represented by a company while borrowing…

Q: How is the retirement of bonds recorded?

A: Retirement of bonds can be at maturity date or before maturity date. Accounting for bonds retired at…

Characteristics of Bonds