1.Bond interest paid by a corporation is an expense, whereas dividends paid are not an expense of the corporation.
2.Financial leverage refers to the practice of borrowing at one rate and investing at another.
3.Neither corporate bond interest nor dividends is deductible for income tax purposes.
4.Secured bonds are issued against the general credit of the borrower.
5.The corporation issuing the bonds does not journalize transactions between the bondholder and other investors.
6.If bonds are issued at a discount, the issuing corporation will repay an amount less than the face amount of the bonds on the maturity date.
7.If $ 180,000, 9%, bonds are issued on January 1, and pay interest semi-annually, the amount of interest paid on July 1, will be $ 8,100.
8.The debt to total assets ratio measures the degree to which a company’s assets are financed internally.
9.Instalment notes with blended principal and interest payments apply a fixed amount to the principal balance of the note with each payment.
10.A long-term note that pledges title to specific property as security for a loan is known as a mortgage payable.