AFM121 Chapter Notes - Chapter 11: Convertible Bond, Pension Fund, Repossession

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM121
• Professor: Andrew Ecclestone

Document Summary

Afm 101 chapter 11: reporting and interpreting non-current liabilities: describe the characteristics of long-term notes and bonds payable. No assets are pledged as a guarantee of repayment at maturity. Specific assets are pledged as a guarantee or repayment at maturity. Bond may be called for early retirement by issuer. Bond may be converted to common shares of the issuer. Afm 101 chapter 11: reporting and interpreting non-current liabilities: depend on supply and demand of money, most important rate is one at which federal government can borrow money for long-term. Discount: corporations are and creditors are indifferent to whether a bond is issued at par, discount, or at a premium because bonds are always priced to provide the market rate of interest. Cash (a: bond interest payment dates rarely coincide with last day of company"s, interest expense incurred but not paid must be accrued with an fiscal year adjusting entry. *carrying amount of bond = premium on bonds payable.