Tag: bonds’

What is coupon rate and coupon payments?

 - by Cindy

This is what i understand so far, hope it correct:

Coupon rate: fixed interest rate borrowers must pay to lenders.

Coupon payments: Interest paid by bond issuer to investor.

Also, i want to know who can issue bonds? (Just government?)

What is their advantages of issuing a bond?

And who can lent this money? e.g firms only or can anyone loan it?

Please give me simple explaination as I am new to these terms. Thank you.

How do I figure straight line amortization without a coupon?

 - by Cindy

Amortization without coupon!?
On Aug. 1st 2005 a company issues bonds with a par value of 0,000. The bonds mature in ten years and pay %6 interest, payable each Feb. 1st and Aug. 1st. The bonds sold at 2,000. The company uses the straight line method of amortizing bond discounts. The company’s year end is Dec. 31. Prepare the general journal entry to record the interest accrued atr Dec. 31 2005.