Solved

Match Each Definition with Its Term

Question 192

Matching

Match each definition with its term

Premises:
1 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
Bonds that give the issuer an option of retiring them at a stated amount before the date of maturity
Bonds that require the issuer to create a fund of assets at specified amounts and dates to repay the bonds at maturity
Bonds that have specific assets of the issuer pledged as collateral
The ratio of total liabilities to total equity
The difference between the par value of a bond and its higher issue price or carrying value
The interest rate specified in the bond indenture
A written promise to pay an amount identified as the par value along with interest at a stated rate
The net amount at which bonds are reported on the balance sheet
Responses:
Secured bonds
Annuity
Premium on bonds
Callable bonds
Contract rate
Bond indenture
Sinking fund bonds
Carrying value
Debt to equity ratio
Bond

Correct Answer:

1 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
Bonds that give the issuer an option of retiring them at a stated amount before the date of maturity
Bonds that require the issuer to create a fund of assets at specified amounts and dates to repay the bonds at maturity
Bonds that have specific assets of the issuer pledged as collateral
The ratio of total liabilities to total equity
The difference between the par value of a bond and its higher issue price or carrying value
The interest rate specified in the bond indenture
A written promise to pay an amount identified as the par value along with interest at a stated rate
The net amount at which bonds are reported on the balance sheet
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