| A) | Bonds that give the issuer an option of retiring them at a stated dollar amount prior to maturity.
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| B) | A series of equal payments occurring at equal time intervals.
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| C) | A written promise to pay an amount identified as the par value of the bond along with interest at a stated annual amount; usually issued in denominations of $1,000.
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| D) | The interest rate specified in the bond indenture; it is multiplied by the par value of the bonds to determine the amount of interest to be paid each year; also called the coupon rate, the stated rate, or the nominal rate.
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| E) | A short-term lease that does not require the lessee to record the right to use the property as an asset or to record any liability for future lease payments.
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| F) | Bonds that are scheduled for payment (mature) at a single specified date.
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| G) | A document containing information about the bond, such as the issuer's name, the bond's par value, the contract interest rate, and the maturity date.
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| H) | Bonds that are made payable to whomever holds them (called the bearer); also called unregistered bonds.
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| I) | Bonds that can be exchanged by the bondholders for a fixed number of shares of the issuing company's common shares.
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| J) | The difference between the par value of a bond and its higher issue price; arises when the contract rate is higher than the market rate.
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| K) | The net amount at which bonds are reflected on the balance sheet; equals the par value of the bonds less any unamortized discount or plus any unamortized premium; also called the book value of the bonds.
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| L) | A lease that gives the lessee the risks and benefits normally associated with ownership.
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| M) | Allocates interest expense over the life of the bonds in a way that yields a constant rate of interest; interest expense for a period is found by multiplying the balance of the liability at the beginning of the period by the bonds' original market rate.
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| N) | Bonds owned by investors whose names and addresses are recorded by the issuing company; the interest payments are made with cheques to the registered owners.
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| O) | A legal agreement that protects a lender by giving the lender the right to be paid out of the cash proceeds from the sale of the borrower's specific assets identified in the mortgage.
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| P) | An obligation requiring a series of periodic payments to the lender.
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| Q) | Bonds that give the purchaser an option of retiring them at a stated dollar amount prior to maturity.
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| R) | Bonds that have specific assets of the issuing company pledged as collateral.
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| S) | Bonds that are backed by the issuer's general credit standing; unsecured bonds are almost always more risky than secured bonds; also called debentures.
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| T) | Bonds that have interest coupons attached to their certificates; the bondholders detach the coupons when they mature and present them to a bank or broker for collection.
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| U) | The interest rate that borrowers are willing to pay and that lenders are willing to earn for a particular bond given its risk level. Also called the effective interest rate.
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| V) | Bonds that mature at different dates with the result that the entire debt is repaid gradually over a number of years.
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| W) | The contract between the bond issuer and the bondholders; it identifies the rights and obligations of the parties.
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| X) | The difference between the par value of a bond and its lower issue price; arises when the contract rate is lower than the market rate.
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| Y) | When a company earns a higher return with borrowed funds than it is paying in interest, the result is an increase in return on equity.
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| Z) | The amount that the bond issuer agrees to pay at maturity and the amount on which interest payments are based; also called the face amount or face value.
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| AA) | A method of amortization that allocates an equal amount of interest to each accounting period in the life of bonds.
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