Accounting Mod8

The discount that results when the selling price of bonds is less than the face value of the bonds.

Occurs when the market interest rate is GREATER than contractual interest rate.

all benefits and risks of ownership are on lessee, effectively results in purchase of property.

rate that determines the amount of interest paid by borrower and received by lender

bonds that can be converted into shares

unsecured bonds, issued against general credit of borrower

Total Liabilities / Total Assets

Earnings before Interest and Tax

Net Income + Interest Expense + Income Tax Expense

A method of amortizing a bond discount or bond premium that results in periodic interest expense equal to a constant % of the carrying value of the bond.

ability of a company to meet interest obligations.

EBIT/interst expense

rate that investors require for lending money to a corporation

the intentional effort by a company to structure its financing arrangements so as to avoid showing liabilities on its books

lessee has tempory use of property, lessor still retains all ownership risks and rewards

difference that results when the selling price of th ebonds is greater than the face value of the bonds.

Occurs when the market interest rate is LESS than the contractual interest rate.

value today of an amount to be received at some date in the future after taking interest rates into account

issuer can redeem at stated dollar amount before maturity date

bondholder can redeem at a stated dollar amount before maturity

mature in installments

mature at a single specific future date