Bond indenture
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
Previous: ← Contractual interest rate
Next: Present value →
More from this Section
- Physical units
Physical units are the actual units to be accounted for during a period, irrespective ... - Consistency principle
Consistency principle dictates that a company uses the same accounting principles and ... - The Sarbanes-Oxley Act (SOX)
Sarbanes-Oxley Act is the regulations passed by Congrees in 2002 to try to reduce unethical ... - Operating activities
Operating activities refer to cash flow activities that include the cash effects of transactions ... - Standard predetermined overhead rate
Standard predetermined overhead rate is an overhead rate determined by dividing budgeted ...