E11.4
E11.4
Bonds payable: It is a long term liability to the organization issuing it. It is issued to raise debt to use it in the business operations of the organization. It is an agreement between the issuer and the holder to pay the interest on regular intervals and the principal amount on date of maturity of bonds.
Face value of bonds: It is the par value or the value of the bond on the bond certificate. It is the value which is repaid by the organization to the holder of the bonds at maturity.
Issue price of bonds: It is the price at which the bonds are actually issued by the organization. The issue price may be less than the face value or more than the face value.
Interest expense: It is the interest which is incurred by the organization on the bonds issued at regular intervals.
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