AFM101 Lecture Notes - Debenture, Pension, Promissory Note

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM101
• Professor: Donna Psutka

Document Summary

Afm 101 chapter 11 notes reporting and interpreting non-current liabilities. Long-term liabilities include notes payable, bonds payable, debentures. Ownership not diluted, existing owners maintain their % ownership. Private placement: raising debt from a financial service organization, such as banks, insurance companies etc. , often settled on a notes payable with a maturity date. A bond usually requires the payment of interests over its life, with the repayment of principal on the maturity date: bond principal: the amount payable at the maturity (due date) of the bond. It is also the basis for computing periodic cash interest payments (a. k. a. par value or face amount) > the par value of most bonds is typically ,000: the basis for computing periodic cash interest payments. A bond always specifies a stated rate and timing of period cash interest payments (semi- annually or annually) Stated rate: the rate of interest per period specified in the bond contract.