Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 10 - Reporting and Analyzing Liabilities - Questions - Page 541: 10

Answer

Step1: Face value Step2: Contractual interest rate Step3: Bond certificate

Work Step by Step

Step1: The principal amount due at the maturity date is the face value of Bond. Step2: The rate of interest payable by the issuer company on the bond to the bondholder periodically is called contractual interest rate. Step3: It is a document issued to the bondholder, to provide evidence of the investor's claim against the company, on the terms and conditions specified therein.
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