The Money Farm Team

Discount on bonds payable is a counter account to bonds payable that reduces the value of the bonds and is deducted from bonds payable in the long-term liabilities area of the balance sheet. It is initially the difference between the cash received and the bond’s maturity value. On the balance sheet, where does the discount […]

The excess amount by which bonds are issued over their face value is known as premium on bonds payable. This is recorded as a liability on the issuer’s books and is amortized to interest expense throughout the bonds’ remaining life. This amortization has the net effect of lowering the amount of interest expenditure associated with […]

Bonds payable is a liability account that holds the amount that the issuer owes to bondholders. Because bonds frequently mature in more than one year, this account is usually seen in the long-term liabilities part of the balance sheet. If they are due to mature in less than a year, the line item is moved […]

Tax-exempt municipal bonds are divided into two categories based on how the money borrowed is repaid: general obligation bonds and revenue bonds. What exactly is a tax-free bond? Every state has a state-chartered bond authority. Healthcare facility authority, housing finance agencies, higher education facility authorities, and industrial development finance authorities are all examples of these. […]

Standard & Poor’s Global Ratings, Moody’s, and Fitch Ratings are the three major bond rating organizations in the United States. Each has a distinct letter-based grading system to swiftly communicate to investors whether a bond has a low or high default risk, as well as whether the issuer is financially sound. Standard & Poor’s highest […]

A bond is just a debt that a firm takes out. Rather than going to a bank, the company obtains funds from investors who purchase its bonds. The corporation pays an interest coupon in exchange for the capital, which is the annual interest rate paid on a bond stated as a percentage of the face […]

Stocks give you a stake in a firm, but bonds are a debt from you to a company or the government. The most significant distinction is in how they create profit: stocks must increase in value and then be sold on the stock market, whereas most bonds pay a fixed rate of interest over time. […]

Know two things about risk before investing in a bond: your individual risk tolerance and the risk inherent in the instrument (via its rating). Consider the maturity date of a bond and whether the issuer has the option to call it in before it matures. Is it clear that the issuer will be able to […]

A bond is just a debt that a firm takes out. Rather than going to a bank, the company obtains funds from investors who purchase its bonds. The corporation pays an interest coupon in exchange for the capital, which is the annual interest rate paid on a bond stated as a percentage of the face […]

The interest payments on 10-year Treasury notes and other federal government securities are tax-free in all 50 states and the District of Columbia. They are, however, nevertheless taxed at the federal level. The US Treasury offers 10-year T-notes and shorter-term T-notes, as well as T-bills and bonds, directly through the TreasuryDirect website via competitive or […]