Long-term debt: A debt payable by the company for more than a period of 12 months or 1 year is termed as long-term debt. It is a form of company’s loan and other liabilities. Every company must disclose long-term debts on their balance sheet (financial statement) with the appropriate interest rate and maturity date. (a) To discuss: To discuss the sources of long-term debt.

Question

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Answer 1

Question

Chapter 14, Problem 1Q

To determine

Long-term debt: A debt payable by the company for more than a period of 12 months or 1 year is termed as long-term debt. It is a form of company’s loan and other liabilities. Every company must disclose long-term debts on their balance sheet (financial statement) with the appropriate interest rate and maturity date.

(a)

To discuss: To discuss the sources of long-term debt.

Expert Solution

Explanation of Solution

Justification: The corporation acquires or raises funds through long-term debt from different sources, like:

Issuance of bonds.
Mortgages.
Bonds.
Long-term notes.

Conclusion

Thus, the sources from where a corporation acquires funds by means of long-term debts are listed in the solution.

To determine

(b)

To discuss: To discuss the meaning of bond indenture and elements contained in the bond indenture.

Expert Solution

Explanation of Solution

Justification: Bond’s indenture is a legally enforceable contract between the bond issuer and bondholder. The issuer of bonds signs this form of agreement. This contract enforces obligations that must be performed by the bond issuer to the bondholder.

Bond indenture contains certain restrictive covenants mainly for the protection of the bondholders. It includes restriction on the payment of dividend, restriction on future borrowings, and restriction on behalf of maintaining the minimum level of working capital.

Conclusion

Thus, the given terms are explained.

To determine

(c)

To discuss: To discuss the meaning of mortgages.

Expert Solution

Explanation of Solution

Justification: Mortgages are important debt instrument of a company. A mortgage is a document that is stated on the security of a loan. It even clearly specifies the rights of the mortgagee under default of repayment of the debt or loan. As a result, the borrower is obliged to repay with the set of predetermined payments.

Conclusion

Thus, the given terms are explained.

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06:16

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Answer 2

Question

Chapter 14, Problem 1Q

To determine

Long-term debt: A debt payable by the company for more than a period of 12 months or 1 year is termed as long-term debt. It is a form of company’s loan and other liabilities. Every company must disclose long-term debts on their balance sheet (financial statement) with the appropriate interest rate and maturity date.

(a)

To discuss: To discuss the sources of long-term debt.

Expert Solution

Explanation of Solution

Justification: The corporation acquires or raises funds through long-term debt from different sources, like:

Issuance of bonds.
Mortgages.
Bonds.
Long-term notes.

Conclusion

Thus, the sources from where a corporation acquires funds by means of long-term debts are listed in the solution.

To determine

(b)

To discuss: To discuss the meaning of bond indenture and elements contained in the bond indenture.

Expert Solution

Explanation of Solution

Justification: Bond’s indenture is a legally enforceable contract between the bond issuer and bondholder. The issuer of bonds signs this form of agreement. This contract enforces obligations that must be performed by the bond issuer to the bondholder.

Bond indenture contains certain restrictive covenants mainly for the protection of the bondholders. It includes restriction on the payment of dividend, restriction on future borrowings, and restriction on behalf of maintaining the minimum level of working capital.

Conclusion

Thus, the given terms are explained.

To determine

(c)

To discuss: To discuss the meaning of mortgages.

Expert Solution

Explanation of Solution

Justification: Mortgages are important debt instrument of a company. A mortgage is a document that is stated on the security of a loan. It even clearly specifies the rights of the mortgagee under default of repayment of the debt or loan. As a result, the borrower is obliged to repay with the set of predetermined payments.

Conclusion

Thus, the given terms are explained.

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Answer 3

Question

Chapter 14, Problem 1Q

To determine

Long-term debt: A debt payable by the company for more than a period of 12 months or 1 year is termed as long-term debt. It is a form of company’s loan and other liabilities. Every company must disclose long-term debts on their balance sheet (financial statement) with the appropriate interest rate and maturity date.

(a)

To discuss: To discuss the sources of long-term debt.

Expert Solution

Explanation of Solution

Justification: The corporation acquires or raises funds through long-term debt from different sources, like:

Issuance of bonds.
Mortgages.
Bonds.
Long-term notes.

Conclusion

Thus, the sources from where a corporation acquires funds by means of long-term debts are listed in the solution.

To determine

(b)

To discuss: To discuss the meaning of bond indenture and elements contained in the bond indenture.

Expert Solution

Explanation of Solution

Justification: Bond’s indenture is a legally enforceable contract between the bond issuer and bondholder. The issuer of bonds signs this form of agreement. This contract enforces obligations that must be performed by the bond issuer to the bondholder.

Bond indenture contains certain restrictive covenants mainly for the protection of the bondholders. It includes restriction on the payment of dividend, restriction on future borrowings, and restriction on behalf of maintaining the minimum level of working capital.

Conclusion

Thus, the given terms are explained.

To determine

(c)

To discuss: To discuss the meaning of mortgages.

Expert Solution

Explanation of Solution

Justification: Mortgages are important debt instrument of a company. A mortgage is a document that is stated on the security of a loan. It even clearly specifies the rights of the mortgagee under default of repayment of the debt or loan. As a result, the borrower is obliged to repay with the set of predetermined payments.

Conclusion

Thus, the given terms are explained.

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06:16

Answer 4

Question

Chapter 14, Problem 1Q

To determine

Long-term debt: A debt payable by the company for more than a period of 12 months or 1 year is termed as long-term debt. It is a form of company’s loan and other liabilities. Every company must disclose long-term debts on their balance sheet (financial statement) with the appropriate interest rate and maturity date.

(a)

To discuss: To discuss the sources of long-term debt.

Expert Solution

Explanation of Solution

Justification: The corporation acquires or raises funds through long-term debt from different sources, like:

Issuance of bonds.
Mortgages.
Bonds.
Long-term notes.

Conclusion

Thus, the sources from where a corporation acquires funds by means of long-term debts are listed in the solution.

To determine

(b)

To discuss: To discuss the meaning of bond indenture and elements contained in the bond indenture.

Expert Solution

Explanation of Solution

Justification: Bond’s indenture is a legally enforceable contract between the bond issuer and bondholder. The issuer of bonds signs this form of agreement. This contract enforces obligations that must be performed by the bond issuer to the bondholder.

Bond indenture contains certain restrictive covenants mainly for the protection of the bondholders. It includes restriction on the payment of dividend, restriction on future borrowings, and restriction on behalf of maintaining the minimum level of working capital.

Conclusion

Thus, the given terms are explained.

To determine

(c)

To discuss: To discuss the meaning of mortgages.

Expert Solution

Explanation of Solution

Justification: Mortgages are important debt instrument of a company. A mortgage is a document that is stated on the security of a loan. It even clearly specifies the rights of the mortgagee under default of repayment of the debt or loan. As a result, the borrower is obliged to repay with the set of predetermined payments.

Conclusion

Thus, the given terms are explained.

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06:16

Answer 5

Chapter 14, Problem 1Q

To determine

Long-term debt: A debt payable by the company for more than a period of 12 months or 1 year is termed as long-term debt. It is a form of company’s loan and other liabilities. Every company must disclose long-term debts on their balance sheet (financial statement) with the appropriate interest rate and maturity date.

(a)

To discuss: To discuss the sources of long-term debt.

Expert Solution

Explanation of Solution

Justification: The corporation acquires or raises funds through long-term debt from different sources, like:

Issuance of bonds.
Mortgages.
Bonds.
Long-term notes.

Conclusion

Thus, the sources from where a corporation acquires funds by means of long-term debts are listed in the solution.

To determine

(b)

To discuss: To discuss the meaning of bond indenture and elements contained in the bond indenture.

Expert Solution

Explanation of Solution

Justification: Bond’s indenture is a legally enforceable contract between the bond issuer and bondholder. The issuer of bonds signs this form of agreement. This contract enforces obligations that must be performed by the bond issuer to the bondholder.

Bond indenture contains certain restrictive covenants mainly for the protection of the bondholders. It includes restriction on the payment of dividend, restriction on future borrowings, and restriction on behalf of maintaining the minimum level of working capital.

Conclusion

Thus, the given terms are explained.

To determine

(c)

To discuss: To discuss the meaning of mortgages.

Expert Solution

Explanation of Solution

Justification: Mortgages are important debt instrument of a company. A mortgage is a document that is stated on the security of a loan. It even clearly specifies the rights of the mortgagee under default of repayment of the debt or loan. As a result, the borrower is obliged to repay with the set of predetermined payments.

Conclusion

Thus, the given terms are explained.

Answer 6

Chapter 14, Problem 1Q

To determine

Long-term debt: A debt payable by the company for more than a period of 12 months or 1 year is termed as long-term debt. It is a form of company’s loan and other liabilities. Every company must disclose long-term debts on their balance sheet (financial statement) with the appropriate interest rate and maturity date.

(a)

To discuss: To discuss the sources of long-term debt.

Expert Solution

Explanation of Solution

Justification: The corporation acquires or raises funds through long-term debt from different sources, like:

Issuance of bonds.
Mortgages.
Bonds.
Long-term notes.

Conclusion

Thus, the sources from where a corporation acquires funds by means of long-term debts are listed in the solution.

Answer 7

Chapter 14, Problem 1Q

To determine

Long-term debt: A debt payable by the company for more than a period of 12 months or 1 year is termed as long-term debt. It is a form of company’s loan and other liabilities. Every company must disclose long-term debts on their balance sheet (financial statement) with the appropriate interest rate and maturity date.

(a)

To discuss: To discuss the sources of long-term debt.

Answer 8

Expert Solution

Explanation of Solution

Justification: The corporation acquires or raises funds through long-term debt from different sources, like:

Issuance of bonds.
Mortgages.
Bonds.
Long-term notes.

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Conclusion

Thus, the sources from where a corporation acquires funds by means of long-term debts are listed in the solution.

Answer 13

To determine

(b)

To discuss: To discuss the meaning of bond indenture and elements contained in the bond indenture.

Expert Solution

Explanation of Solution

Justification: Bond’s indenture is a legally enforceable contract between the bond issuer and bondholder. The issuer of bonds signs this form of agreement. This contract enforces obligations that must be performed by the bond issuer to the bondholder.

Bond indenture contains certain restrictive covenants mainly for the protection of the bondholders. It includes restriction on the payment of dividend, restriction on future borrowings, and restriction on behalf of maintaining the minimum level of working capital.

Conclusion

Thus, the given terms are explained.

Answer 14

To determine

(b)

To discuss: To discuss the meaning of bond indenture and elements contained in the bond indenture.

Answer 15

Expert Solution

Explanation of Solution

Justification: Bond’s indenture is a legally enforceable contract between the bond issuer and bondholder. The issuer of bonds signs this form of agreement. This contract enforces obligations that must be performed by the bond issuer to the bondholder.

Bond indenture contains certain restrictive covenants mainly for the protection of the bondholders. It includes restriction on the payment of dividend, restriction on future borrowings, and restriction on behalf of maintaining the minimum level of working capital.

Answer 16

Expert Solution

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

Conclusion

Thus, the given terms are explained.

Answer 20

To determine

(c)

To discuss: To discuss the meaning of mortgages.

Expert Solution

Explanation of Solution

Justification: Mortgages are important debt instrument of a company. A mortgage is a document that is stated on the security of a loan. It even clearly specifies the rights of the mortgagee under default of repayment of the debt or loan. As a result, the borrower is obliged to repay with the set of predetermined payments.

Conclusion

Thus, the given terms are explained.

Answer 21

To determine

(c)

To discuss: To discuss the meaning of mortgages.

Answer 22

Expert Solution

Explanation of Solution

Justification: Mortgages are important debt instrument of a company. A mortgage is a document that is stated on the security of a loan. It even clearly specifies the rights of the mortgagee under default of repayment of the debt or loan. As a result, the borrower is obliged to repay with the set of predetermined payments.