Solved

Match Each of the Following Terms with the Appropriate Definitions

Question 190

Matching

Match each of the following terms with the appropriate definitions 1 through 10.

Premises:
Debt to equity ratio
Secured bonds
Carrying value
Contract rate
Bond indenture
Sinking fund bonds
Callable bonds
Premium on bonds
Bond
Annuity
Responses:
The net amount at which bonds are reported on the balance sheet
A series of equal payments at equal intervals
Bonds that have specific assets of the issuer pledged as collateral
Bonds that give the issuer an option of retiring them at a stated amount before the date of maturity
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
Bonds that require the issuer to create a fund of assets at specified amounts and dates to repay the bonds at maturity
A written promise to pay an amount identified as the par value along with interest at a stated rate
The ratio of total liabilities to total equity
The contract between the bond issuer and the bondholder(s); it identifies the rights and obligations of the parties

Correct Answer:

Debt to equity ratio
Secured bonds
Carrying value
Contract rate
Bond indenture
Sinking fund bonds
Callable bonds
Premium on bonds
Bond
Annuity
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