Type of Bonds
Used a coupon to redeem interest payment.
Coupon Bond
Issue bond at 96.
96% of face value
Process to reduce premium or discount.
Amortization
Amount to pay back at end of bond.
Maturity Value
Bond backed by a lien on real estate.
Mortgage Bond
Issue bond at 102
Price is 102% of face value
Value higher than check amount in case of discount.
Effective Interest
Used to determine interest payment.
Coupon or Face Rate
Bond holder receives stock in exchange on redemption / retirement.
Convertible Bond
Receive less than face amount.
Discount
Value lower than check amount in case of premium.
Effective Interest
Used to determine interest expense.
Effective or Market Rate
Issuing company has right to buy back bond.
Callable Bond
Receive more than face amount.
Premium
Apply to effective rate to obtain interest expense.
Book Value
Method applied to have equal amounts of expense.
Straight-line
Bond structured to systematically retire on piece-meal basis.
Serial Bond
Used to calculate a bond price.
PV of Annuity + Maturity Value
Apply coupon rate to obtain check amount.
Face / Maturity Amount
Reduces cash received from issuance of bond.
Debt Issue Costs