💰Bonds are used to finance large-scale projects.
💵Bonds can be broken into detachable units to attract more investors.
📈Bonds can be sold at a premium or a discount.
🔑Bonds have a stated interest rate and maturity period.
🧩Amortization is the practice of spreading discounts and premiums over the life of the bond.
What are bonds?
—Bonds are long-term liabilities issued by governments and corporations to finance projects.
How are bonds different from notes payable?
—Bonds can be broken into detachable units, while notes payable require a single lender.
How are bond prices determined?
—Bond prices are determined based on market demand and can be sold at a premium or a discount.
What is the face amount of a bond?
—The face amount of a bond reflects the principal amount borrowed.
What is amortization?
—Amortization is the practice of spreading discounts and premiums over the life of the bond.
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00:04Bonds are long-term liabilities issued by governments and corporations.
00:13Bonds can be broken into detachable units to attract more investors.
00:22Bonds can be sold at a premium or a discount.
01:00Bonds have a stated interest rate and maturity period.
01:49Amortization is the practice of spreading discounts and premiums over the life of the bond.
