15-1 Long-Term Liabilities 15 Learning Objectives Describe the major characteristics of bonds. Explain how to account for bond transactions. Explain how.

15-1

Long-Term Liabilities15Learning Objectives

Describe the major characteristics of bonds.

Explain how to account for bond transactions.

Explain how to account for long-term notes payable.3

2

1

Discuss how long-term liabilities are reported and analyzed.

4

15-2

Long-term liabilities are obligations that are expected to

be paid after one year.

Bonds are a form of interest-bearing notes payable.

Sold in small denominations (usually $1,000 or multiples

of $1,000).

Attract many investors.

Corporation issuing bonds is borrowing money.

Person who buys the bonds (the bondholder) is investing

in bonds.

LO 1

LEARNINGOBJECTIVE

Describe the major characteristics of bonds.

1

15-3

Types of Bonds

LO 1

15-4

State laws grant corporations the power to issue bonds.

Board of directors and stockholders must approve bond

issues.

Board of directors must stipulate number of bonds to be

authorized, total face value, and contractual interest

rate.

Bond terms set forth in legal document known as a bond

indenture.

Bond certificate, typically a $1,000 face value.

Bonds

Issuing Procedures

LO 1

15-5

Represents a promise to pay:

► sum of money at designated maturity date, plus

► periodic interest at a contractual (stated) rate on the

maturity amount (face value).

Interest payments usually made semiannually.

Issued to obtain large amounts of long-term capital.

Investment company sells the bonds for the issuing

company.

Bonds

LO 1

Issuing Procedures

15-6 LO 1

Illustration 15-1Bond certificate

15-7

Determining the Market Value of a Bond

Current market price (present value) is a function of the three

factors:

1. dollar amounts to be received,

2. length of time until the amounts are received, and

3. market rate of interest.

The market interest rate is the rate investors demand for

loaning funds.

LO 1

15-8


Illustration: Assume that Acropolis Company on January 1, 2017,

issues $100,000 of 9% bonds, due in five years, with interest

payable annually at year-end. The purchaser of the bonds would

receive the following two types of cash payments: (1) principal of

$100,000 to be paid at maturity, and (2) five $9,000 interest

payments ($100,000 x 9%) over the term of the bonds.

LO 1Illustration 15-2Time diagram depicting cash flows

15-9


The current market price of a bond is equal to the present value of

all the future cash payments promised by the bond.

LO 1

Illustration 15-3Computing the market price of bonds

Illustration 15-2

15-10

State whether each of the following statements is true or false.

_______ 1. Mortgage bonds and sinking fund bonds are both

examples of secured bonds.

_______ 2. Unsecured bonds are also known as debenture bonds.

_______ 3. The stated rate is the rate investors demand for loaning

funds.

_______ 4. The face value is the amount of principal the issuing

company must pay at the maturity date.

_______ 5. The market price of a bond is equal to its maturity

value.

DO IT! Bond Terminology1

LO 1

True

True

False

True

False

15-11

Corporation records bond transactions when it

issues (sells),

redeems (buys back) bonds, and

when bondholders convert bonds into common stock.

NOTE: If bondholders sell their bond investments to other investors,

the issuing company receives no further money on the transaction,

nor does the issuing company journalize the transaction.

LO 2

LEARNINGOBJECTIVE

Explain how to account for bond transactions.

2

15-12

Issue at Face Value, Discount, or Premium?

Bond Contractual

Interest Rate 10%

LO 2

Illustration 15-4Interest rates and bond prices

Run slide show to reveal “Bonds Sell at.”

Accounting for Bond Transactions

15-13

The rate of interest investors demand for loaning funds to a

corporation is the:

a. contractual interest rate.

b. face value rate.

c. market interest rate.

d. stated interest rate.

Question

LO 2


15-14

Karson Inc. issues 10-year bonds with a maturity value of $200,000.

If the bonds are issued at a premium, this indicates that:

a. the contractual interest rate exceeds the market interest rate.

b. the market interest rate exceeds the contractual interest rate.

c. the contractual interest rate and the market interest rate are

the same.

d. no relationship exists between the two rates.

LO 2

Question


15-15

Illustration: On January 1, 2017, Candlestick, Inc. issues

$100,000, five-year, 10% bonds at 100 (100% of face value).

The entry to record the sale is:

Jan. 1 Cash 100,000

Bonds Payable 100,000

LO 2

Issuing Bonds at Face Value

15-16



Assume that interest is payable annually on January 1. At

December 31, 2017, Candlestick recognizes interest

expense incurred with the following entry. Assume monthly

accruals have not been made.

Dec. 31 Interest Expense 10,000

Interest Payable 10,000

LO 2


15-17



Assume that interest is payable annually on January 1.

Candlestick records the payment on January 1, 2018, as

follows.

Jan. 1 Interest Payable 10,000

Cash 10,000

LO 2


15-18

Illustration: On January 1, 2017,

Candlestick, Inc. sells $100,000, five-year,

10% bonds for $98,000 (98% of face value).

Interest is payable annually January 1. The

entry to record the issuance is:

Jan. 1 Cash 98,000

Discount on Bonds Payable 2,000


LO 2

Issuing Bonds at a Discount

15-19

Sale of bonds below face value (discount) =

total cost of borrowing > interest paid.

Reason: Borrower is required to pay the bond discount at the

maturity date. Therefore, the bond discount is considered

to be a increase in the cost of borrowing.

Statement PresentationIllustration 15-5Statement presentation ofdiscount on bonds payable

Carrying value or book value

LO 2


15-20

Total Cost of Borrowing

LO 2

Illustration 15-7

Illustration 15-6

OR


15-21 LO 2


Illustration 15-8Amortization of bond discount

15-22

Discount on Bonds Payable:

a. has a credit balance.

b. is a contra account.

c. is added to bonds payable on the balance sheet.

d. increases over the term of the bonds.

Question

LO 2


15-23

Jan. 1 Cash 102,000


Premium on Bonds Payable 2,000

Illustration: On January 1, 2017,

Candlestick, Inc. sells $100,000, five-year,

10% bonds for $102,000 (102% of face

value). Interest is payable annually

January 1. The entry to record the issuance

is:

LO 2

Issuing Bonds at a Premium

15-24

Sale of bonds above face value (premium) =

total cost of borrowing < interest paid.

Reason: Borrower is not required to pay the bond premium

at the maturity date of the bonds. Therefore, the bond

premium is considered to be a reduction in the cost of

borrowing.LO 2

Statement PresentationIllustration 15-9Statement presentation ofdiscount on bonds payable


15-25

Total Cost of Borrowing

LO 2

Illustration 15-11

Illustration 15-10

OR


15-26 LO 2


Illustration 15-12Amortization of bond premium

15-27

Giant Corporation issues $200,000 of bonds for $189,000. (a)

Prepare the journal entry to record the issuance of the bonds, and

(b) show how the bonds would be reported on the balance sheet at

the date of issuance.

Solution

DO IT! Bond Issuance2a

(a) Cash 189,000



(b) Long-term liabilities

Bonds payable $200,000

Less: Discount on bonds payable 11,000 $189,000

LO 2

15-28

Jan. 1 Bonds Payable 100,000

Cash 100,000

Assuming that the company pays and records separately the

interest for the last interest period, Candlestick records the

redemption of its bonds at maturity as follows:

REDEEMING BONDS AT MATURITY

LO 2

15-29

When bonds are redeemed before maturity, it is necessary to:

1. eliminate carrying value of bonds at redemption date;

2. record cash paid; and

3. recognize gain or loss on redemption.

The carrying value of the bonds is the face value of the bonds less any

remaining bond discount or plus any remaining bond premium at the

redemption date.

REDEEMING BONDS BEFORE MATURITY

LO 2

15-30

When bonds are redeemed before maturity, the gain or loss

on redemption is the difference between the cash paid and

the:

a. carrying value of the bonds.

b. face value of the bonds.

c. original selling price of the bonds.

d. maturity value of the bonds.

Question

LO 2


15-31

Illustration: Assume Candlestick, Inc. has sold its bonds at a

premium. At the end of the fourth period, Candlestick retires

these bonds at 103 after paying the annual interest. The

carrying value of the bonds at the redemption date is $100,400.

Candlestick makes the following entry to record the redemption

at the end of the fourth interest period (January 1, 2021):

Jan. 1 Bonds Payable 100,000

Premium on Bonds Payable 400

Loss on Bond Redemption 2,600

Cash 103,000

LO 2


15-32

Until conversion, the bondholder receives interest on the

bond.

For the issuer, the bonds sell at a higher price and pay a

lower rate of interest than comparable debt securities

without the conversion option.

Upon conversion, the company transfers the carrying

value of the bonds to paid-in capital accounts. No gain or

loss is recognized.

CONVERTING BONDS INTO COMMON STOCK

LO 2

15-33

Illustration: On July 1, Saunders Associates converts

$100,000 bonds sold at face value into 2,000 shares of $10

par value common stock. Both the bonds and the common

stock have a market value of $130,000. Saunders makes the

following entry to record the conversion:

July 1 Bonds Payable 100,000

Common Stock (2,000 x $10) 20,000

Paid-in Capital in Excess of Par— Common Stock 80,000

LO 2


15-34

When bonds are converted into common stock:

a. a gain or loss is recognized.

b. the carrying value of the bonds is transferred to

paid-in capital accounts.

c. the market price of the stock is considered in the

entry.

d. the market price of the bonds is transferred to paid-

in capital.

Question

LO 2


15-35

How About Some Green Bonds?

Unilever recently began producing popular frozen treats such as Magnums and Cornettos, funded by green bonds. Green bonds are debt used to fund activities such as renewable- energy projects. In Unilever’s case, the proceeds from the sale of green bonds are used to clean up the company’s manufacturing operations and cut waste (such as related to energy consumption).

The use of green bonds has taken off as companies now have guidelines as to how to disclose and report on these green-bond proceeds. These standardized disclosures provide transparency as to how these bonds are used and their effect on overall profitability. Investors are taking a strong interest in these bonds. Investing companies are installing socially responsible investing teams and have started to integrate sustainability into their investment processes. The disclosures of how companies are using the bond proceeds help investors to make better financial decisions.

Source: Ben Edwards, “Green Bonds Catch On.” Wall Street Journal (April 3, 2014), p. C5.

People, Planet, and Profit Insight Unilever

LO 2

15-36

R & B Inc. issued $500,000, 10-year bonds at a discount. Prior

to maturity, when the carrying value of the bonds is $496,000,

the company redeems the bonds at 98. Prepare the entry to

record the redemption of the bonds.

Solution

DO IT! Bond Redemption2b

LO 2



Gain on Bond Redemption 6,000

Cash ($500,000 x 98%) 490,000

15-37

Long-Term Notes Payable

LO 3

May be secured by a mortgage that pledges title to

specific assets as security for a loan.

Typically, the terms require the borrower to make

installment payments over the term of the loan. Each

payment consists of

1. interest on the unpaid balance of the loan and

2. a reduction of loan principal.

Companies initially record mortgage notes payable at

face value.

LEARNINGOBJECTIVE

Explain how to account for long-term notes payable.

3

15-38

Illustration: Porter Technology Inc. issues a $500,000, 8%,

20-year mortgage note on December 31, 2017. The terms

provide for semiannual installment payments of $50,926 (not

including real estate taxes and insurance).

LO 3


Illustration 15-13Mortgage installment payment schedule

15-39

Dec. 31 Cash 500,000

Mortgage Payable 500,000

Dec. 31 Interest Expense 40,000


Cash 50,926

Illustration: Porter Technology Inc. issues a $500,000, 8%,

20-year mortgage note on December 31, 2017. The terms

provide for semiannual installment payments of $50,926 (not

including real estate taxes and insurance). Prepare the

entries to record the mortgage and first payment.

LO 3


15-40

Each payment on a mortgage note payable consists of:

a. interest on the original balance of the loan.

b. reduction of loan principal only.

c. interest on the original balance of the loan and

reduction of loan principal.

d. interest on the unpaid balance of the loan and

reduction of loan principal.

Question

LO 3


15-41

Cole Research issues a $250,000, 6%, 20-year mortgage note to

obtain needed financing for a new lab. The terms call for annual

payments of $21,796 each. Prepare the entries to record the

mortgage loan and the first payment.

Solution

DO IT! Long-Term Notes3

LO 3

Cash 250,000


Interest Expense ($250,000 x 6%) 15,000*


Cash 21,796

15-42

Presentation

LO 4

Illustration 15-14Balance sheet presentationof long-term liabilities

Companies report the current maturities of long-term debt under

current liabilities if they are to be paid within one year or the

operating cycle, whichever is longer.

LEARNINGOBJECTIVE

Discuss how long-term liabilities are reported and analyzed.

4

15-43

Two ratios that provide information long-run solvency

and the ability to meet interest payments as they come

due are:

Debt to Assets Ratio

Times Interest Earned

Use of Ratios

LO 4

15-44

Illustration: Kellogg Company reported total liabilities of $8,925

million, total assets of $11,200 million, interest expense of $295

million, income taxes of $476 million, and net income of $1,208

million.

LO 4

The higher the percentage of debt to assets, the greater the

risk that the company may be unable to meet its maturing

obligations.

Illustration 15-15Debt to assets ratio

Use of Ratios

15-45

Illustration: Kellogg Company reported total liabilities of

$8,925 million, total assets of $11,200 million, interest expense

of $295 million, income taxes of $476 million, and net income of

$1,208 million.

LO 4

Illustration 15-16Times interest earned

Times interest earned indicates the company’s ability to meet

interest payments as they come due.

Use of Ratios

15-46

Debt and Equity Financing

Illustration 15-17Advantages of bond financingover common stock

LO 4

15-47

Illustration: Microsystems, Inc. is considering two plans for financing the construction of a new $5 million plant. It is considering two alternatives for raising an additional $5 million: Plan A involves issuing 200,000 shares of common stock at the current market price of $25 per share. Plan B involves issuing $5 million of 8% bonds at face value. Income before interest and taxes will be $1.5 million; income taxes are expected to be 30%.

Debt and Equity Financing

Illustration 15-18

15-48

A lease is a contractual arrangement between a lessor (owner

of the property) and a lessee (renter of the property).

Illustration 15-19

Lease Liabilities and Off-Balance-Sheet Financing

LO 4

15-49

Operating Lease Capital LeaseJournal Entry:

Rent Expense xxx

Cash xxx

Journal Entry:

Leased Equipment xxx

Lease Liability xxx

The issue of how to report leases is the case of substance versus

form. Although technically legal title may not pass, the benefits

from the use of the property do.

A lease that transfers substantially all of the benefits and risks

of property ownership should be capitalized (only

noncancellable leases may be capitalized).

Lease Liabilities

LO 4

15-50

To capitalize a lease, one or more of four criteria must be

met:

Transfers ownership to the lessee.

Contains a bargain purchase option.

Lease term is equal to or greater than 75 percent of the

estimated economic life of the leased property.

The present value of the minimum lease payments

(excluding executory costs) equals or exceeds 90 percent of

the fair value of the leased property.

CAPITAL LEASES

LO 4

15-51

Illustration: Gonzalez Company decides to lease new equipment.

The lease period is four years; the economic life of the leased

equipment is estimated to be five years. The present value of the

lease payments is $190,000, which is equal to the fair market value

of the equipment. There is no transfer of ownership during the

lease term, nor is there any bargain purchase option.

Instructions:

a. What type of lease is this? Explain.

b. Prepare the journal entry to record the lease.

CAPITAL LEASES

LO 4

15-52

Illustration: (a) What type of lease is this? Explain.

Capitalization Criteria:

1. Transfer of ownership

2. Bargain purchase option

3. Lease term => 75% of economic life of leased property

4. Present value of minimum lease payments => 90% of FMV of property

NO

NO

Lease term

4 yrs.Economic life

5 yrs.

YES

80%

YES - PV and FMV are the same.

Capital Lease?

CAPITAL LEASES

LO 4

15-53

Illustration: (b) Prepare the journal entry to record the lease.

The portion of the lease liability expected to be paid in the next

year is a current liability.

The remainder is classified

as a long-term liability.

Leased Asset - Equipment 190,000

Lease Liability 190,000

CAPITAL LEASES

LO 4

15-54

The lessee must record a lease as an asset if the lease:

a. transfers ownership of the property to the lessor.

b. contains any purchase option.

c. term is 75% or more of the useful life of the leased

property.

d. payments equal or exceed 90% of the fair market

value of the leased property.

Question

CAPITAL LEASES

LO 4

15-55

In many corporate loans and bond issuances, the lending agreement specifies debt covenants. These covenants typically are specific financial measures, such as minimum levels of retained earnings, cash flows, times interest earned, or other measures that a company must maintain during the life of the loan. If the company violates a covenant, it is considered to have violated the loan agreement. The creditors can then demand immediate repayment, or they can renegotiate the loan’s terms. Covenants protect lenders because they enable lenders to step in and try to get their money back before the borrower gets too deeply into trouble. During the 1990s, most traditional loans specified between three to six covenants or “triggers.” In more recent years, when lots of cash was available, lenders began reducing or completely eliminating covenants from loan agreements in order to be more competitive with other lenders. Lending to weaker companies on easy terms is now common as investors’ appetite for higher-yielding debt grows stronger and the Federal Reserve keeps money flowing at ultralow rates. Since the 2008 financial crisis, companies have been able to borrow more without offering investors what were once considered standard protections against possible losses.

Sources: Cynthia Koons, “Risky Business: Growth of ’Covenant-Lite’ Debt,” Wall Street Journal (June 18, 2007), p. C2; and Katy Burne, “More Loans Come with Few Strings Attached,” Wall Street Journal June 12, 2014).

Investor Insight “Covenant-Lite” Debt

LO 4

15-56

FX Corporation leases new equipment on December 31, 2017. The

lease transfers ownership to FX at the end of the lease. The present

value of the lease payments is $240,000. After recording this lease,

FX has assets of $2,000,000, liabilities of $1,200,000, and

stockholders’ equity of $800,000. (a) Prepare the entry to record the

lease, and (b) compute the debt to assets ratio at year-end.

DO IT! Lease Liability4

LO 4

(a) Leased Asset—Equipment 240,000

Lease Liability 240,000

(b) The debt to assets ratio = $1,200,000 ÷ $2,000,000 = 60%.

15-57

Illustration: Candlestick, Inc., sold $100,000, five-year, 10%

bonds on January 1, 2017, for $98,000 (discount of $2,000).

Interest is payable on January 1.

Illustration 15C-2

Amortizing Bond Discount

LEARNINGOBJECTIVE

APPENDIX 15A: Apply the straight-line method of amortizing bond discount and bond premium.5

Illustration 15A-2Bond discount amortization schedule LO 5

15-58


bonds on January 1, 2017, for $98,000 (discount of $2,000).

Interest is payable on January 1. The bond discount amortization

for each interest period is $400 ($2,000 ÷ 5).

Journal entry to record the first accrual of bond interest and the

amortization of bond discount on December 31 as follows.

Interest Expense 10,400


Discount on Bonds Payable 400

Dec. 31


LO 5

15-59


bonds on January 1, 2017, for $102,000 (premium of $2,000).

Interest is payable on January 1.

Amortizing Bond Premium

Illustration 15A-4Bond premium amortizationschedule

LO 5

15-60


bonds on January 1, 2017, for $102,000 (premium of $2,000.

Interest is payable on January 1. The bond premium amortization

for each interest period is $400 ($2,000 ÷ 5).

Candlestick records the first accrual of interest on December 31

as follows.




Dec. 31


LO 5

15-61

Under the effective-interest method, the amortization of

bond discount or bond premium results in period interest

expense equal to a constant percentage of the carrying value

of the bonds.

Required steps:

1. Compute the bond interest expense.

2. Compute the bond interest paid or accrued.

3. Compute the amortization amount.

LEARNINGOBJECTIVE

APPENDIX 15B: Apply the effective-interest method of amortizing bond discount and bond premium.6

LO 6

15-62

Required steps:

1. Compute the bond interest expense.

2. Compute the bond interest paid or accrued.

3. Compute the amortization amount.

Effective-Interest Method

Illustration 15B-1Computation of amortizationusing effective-interest method

LO 6

15-63

Illustration: Candlestick, Inc. issues $100,000 of 10%, five-year

bonds on January 1, 2017, for $98,000, with interest payable each

January 1. This results in a discount of $2,000.

Illustration 15B-2


Effective-Interest Method

Illustration 15B-2Bond discount amortization schedule

LO 6

15-64

Candlestick, Inc. records the accrual of interest and amortizationof bond discount on December 31 as follows.




Dec. 31

Amortizing Bond DiscountIllustration 15B-2Bond discount amortization schedule

LO 6

15-65

For the second interest period, at December 31, Candlestickmakes the following adjusting entry.





LO 6

Illustration 15B-2Bond discount amortization schedule

Dec. 31

15-66

Illustration: Candlestick, Inc. issues $100,000 of 10%, five-year

bonds on January 1, 2017, for $102,000, with interest payable

January 1. This results in a premium of $2,000.


Illustration 15B-4Bond premium amortizationschedule

LO 6

15-67




Dec. 31

The entry Candlestick makes on December 31 is:

Amortizing Bond Premium Illustration 15B-4Bond premium amortizationschedule

LO 6

15-68

Similarities

IFRS requires that companies classify liabilities as current or noncurrent on the face of the statement of financial position (balance sheet), except in industries where a presentation based on liquidity would be considered to provide more useful information (such as financial institutions). When current liabilities (also called short-term liabilities) are presented, they are generally presented in order of liquidity.

Key Points

LEARNINGOBJECTIVE

Compare the accounting for long-term liabilities under GAAP and IFRS.

7

LO 7

A Look at IFRS

15-69

Under IFRS, liabilities are classified as current if they are expected to be paid within 12 months.

Similar to GAAP, items are normally reported in order of liquidity. Companies sometimes show liabilities before assets. Also, they will sometimes show long-term liabilities before current liabilities.

The basic calculation for bond valuation is the same under GAAP and IFRS. In addition, the accounting for bond liability transactions is essentially the same between GAAP and IFRS.

Key Points

LO 7

A Look at IFRS

15-70

IFRS requires use of the effective-interest method for amortization of bond discounts and premiums. GAAP allows use of the straight-line method where the difference is not material. Under IFRS, companies do not use a premium or discount account but instead show the bond at its net amount. For example, if a $100,000 bond was issued at 97, under IFRS a company would record:

Cash 97,000


Key Points

LO 7

A Look at IFRS

15-71

Differences

The accounting for convertible bonds differs across IFRS and GAAP, Unlike GAAP, IFRS splits the proceeds from the convertible bond between an equity component and a debt component. The equity conversion rights are reported in equity.

Key Points

LO 7

A Look at IFRS

15-72

Differences

The IFRS leasing standard is IAS 17. Both Boards share the same objective of recording leases by lessees and lessors according to their economic substance—that is, according to the definitions of assets and liabilities. However, GAAP for leases is much more “rules-based” with specific bright-line criteria (such as the “90% of fair value” test) to determine if a lease arrangement transfers the risks and rewards of ownership; IFRS is more conceptual in its provisions. Rather than a 90% cut-off, it asks whether the agreement transfers substantially all of the risks and rewards associated with ownership.

Key Points

LO 7

A Look at IFRS

15-73

The FASB and IASB are currently involved in two projects, each of which has implications for the accounting for liabilities. One project is investigating approaches to differentiate between debt and equity instruments. The other project, the elements phase of the conceptual framework project, will evaluate the definitions of the fundamental building blocks of accounting. In addition to these projects, the FASB and IASB have also identified leasing as one of the most problematic areas of accounting. One of the first areas studied is, “What are the assets and liabilities to be recognized related to a lease contract?” Should the focus remain on the leased item or the right to use the leased item? This question is tied to the Boards’ joint project on the conceptual framework—defining an “asset” and a “liability.”

Looking to the Future

LO 7

A Look at IFRS

15-74

The accounting for bonds payable is:

a) essentially the same under IFRS and GAAP.

b) differs in that GAAP requires use of the straight-line method

for amortization of bond premium and discount.

c) the same except that market prices may be different

because the present value calculations are different

between IFRS and GAAP.

d) not covered by IFRS.

IFRS Self-Test Questions

LO 7

A Look at IFRS

15-75

The leasing standards employed by IFRS:

a) rely more heavily on interpretation of the conceptual

meaning of assets and liabilities than GAAP.

b) are more “rules based” than those of GAAP.

c) employ the same “bright-line test” as GAAP.

d) are identical to those of GAAP.


LO 7

A Look at IFRS

15-76

The joint projects of the FASB and IASB could potentially:

a) change the definition of liabilities.

b) change the definition of equity.

c) change the definition of assets.

d) All of the above.


LO 7

A Look at IFRS

15-77

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15-1 Long-Term Liabilities 15 Learning Objectives Describe the major characteristics of bonds. Explain how to account for bond transactions. Explain how.

Documents

fund bonds

number of bonds

debenture bonds

mortgage bonds

unsecured bonds

market value

market rate

major characteristics