Solved

Match Each of the Following Terms with the Appropriate Definitions

Question 193

Matching

Match each of the following terms with the appropriate definitions

Premises:
Carrying value
Callable bonds
Annuity
Sinking fund bonds
Contract rate
Debt to equity ratio
Bond indenture
Secured bonds
Premium on bonds
Bond
Responses:
The interest rate specified in the bond indenture.
The net amount at which bonds are reported on the balance sheet.
Bonds that require the issuer to create a fund of assets at specified amounts and dates to repay the bonds at maturity.
Bonds that give the issuer an option of retiring them at a stated amount before the date of maturity.
A written promise to pay an amount identified as the par value along with interest at a stated rate.
The difference between the par value of a bond and its higher issue price or carrying value.
The contract between the bond issuer and the bondholder(s); it identifies the rights and obligations of the parties.
A series of equal payments at equal intervals.
The ratio of total liabilities to total equity.
Bonds that have specific assets of the issuer pledged as collateral.

Correct Answer:

Carrying value
Callable bonds
Annuity
Sinking fund bonds
Contract rate
Debt to equity ratio
Bond indenture
Secured bonds
Premium on bonds
Bond
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