| A | B |
|---|
| amortize | to write off a portion of bond discount or premium over the life of the bond issue |
| Bond | a long-term liability in which the corporation promises to repay a certain amount at a specified date and to pay interest at set times. |
| bond certificate | a document that serves as evidence of the corporation's debt. |
| bond indenture | the binding agreement between the corporation and bond holders that defines the rights, privileges, and limitations of bondholders. |
| bond issue | the total amount of bonds issued at the same time. |
| callable bonds | a bond that a corporation has the option to redeem at a certain price. |
| call price | the amount at which the corporation agrees to redeem bonds. |
| carrying value | the amount at which the corporation is carrying the bond issue in the accounting records; the present value of a bond issue. |
| contract rate | the rate of interest stated in the bond indenture. |
| coupon bonds | a bond issue that has interest coupons attached to each bond certificate. |
| discount | the amount by which the face value of bond exceeds the issue price of the bond. |
| face value | the amount written on the "face" of a promissory note. |
| leverage | the ability to earn a greater return on the money borrowed than must be paid out in interest. |
| market interest rate | the interest rate a corporaton is willing to pay and investors are willing to accept for the use of money. |
| mortgage | a formal, legal agreement in which the borrower agrees to repay the amount owed plus interest over a 5-30 year period; the creditor usually has the right to repossess the mortgaged asset if the mortgage is not repaid. |
| premium | the amount received when bonds are issued for more than their face value. |
| registered bonds | a bond issue in which the bond-holders' name are on file with issuing corporation. |
| secured bonds | a bond issue that is covered or backed up by corporate assets such as buildings or equipment. |
| serial bonds | a bond issue that has a series of maturity dates. |
| sinking fund | a special fund used to pay off a bond issue when it comes due. |
| term bonds | a bond issue in which all the bonds have the same term or maturity date. |
| underwriter | an investment firm that handles the sael of a bond issue to the general public. |
| unsecured bonds | bonds that are issued on the corporation's credit standing and not backed up by the assets of the corporation. |
