003 Bond Complications Flashcards
How are bond issue costs accounted for?
Capitalized as a noncurrent deferred charge (asset account) and amortized to expense over the term of the bonds using the straight-line method.
Define “stated rate.”
Rate listed on the bond and used to calculate accrued interest.
Define “bond proceeds.”
The sum of the bond price and any accrued interest.
Define “bond issue costs”.
The costs of printing, registering, and marketing the bonds.
How many months of interest are collected at issuance when bonds are issued between interest dates?
Number of months between the most recent interest payment date and the date of issuance.
What is the length of a bond term when bonds are issued between interest dates?
Period of time from issuance date to maturity date.
Accrued interest on a bond is computed using?
The Stated rate and the Face Value
The proceeds on a bond issue is?
The sum of the bond price and accrued interest
The Bond price and proceeds are the same for a bond?
without accrued interest.
