The terms of the bond issue are set forth in a legal document called a bond indenture. The indenture shows the terms and summarizes the rights of the bond holders and their trustees, and the obligations of the issuing company. The trustee (usually a financial institution) keeps records of each bondholder, maintains custody of issued bonds, and holds conditional title to pledged property.
Bond indenture is a blanket agreement between the corporation and its bondholders that states the bond issue’s interest rate, maturity date, and other terms and conditions.
Category: Accounting & Auditing
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