Long-Term Liabilities

Bond Types

• corporate: issued by private and public companies

• Municipal: issued by governmental entities

• secured: supported by a lien on specific assets where bondholders have first claim on the secured assets.

• debenture: backed only by issuer’s credit where bondholders are general creditors

• term: mature (pays principal) on a single, specified date

• serial: mature (pays principal) on several installment dates.

• callable (Redeemable): subject to early redemption at the option of the issuer

• Convertible: convertible to equity securities at the option of the bondholders

Account type:

•     Equity

  • Paid-in Capital -Stock Warrants

  • Interest Expense

  • Unrealized Gain or Loss-Income

  • Unrealized Gain or Loss-OCI

  • Gain on Redemption of Bonds

  • Debt Conversion Expense

  • Gain on Extinguishment of Bonds

• Liability

  • Discount on Bonds Payable

  • Premium on Bonds Payable

  • Bonds Payable

  • Note Payable

  • Interest Payable

  • Mortgage Payable

Financial Statement Classification

• Balance Sheet

  • Paid-in Capital-Stock Warrants

  • Discount of Bonds Payable

  • Premium on Bonds Payable

  • Bond Payable

  • Note Payable

  • Interest Payable

  • Mortgage Payable

• Face Value (also called maturity value, principal amount, par or stated value): Amount due at bond’s maturity date

installment payment formula: