Long-Term Financing: Bonds
A company can purchase bonds as an investment or can issue bonds as a mechanism to raise capital. It is important to understand the different types of bond issues that a company can use, and the impact of interest rates on those bonds. After this reading, you will be able to explain how a company can use long-term bonds as part of their capital budget.
Appendix: Future value and present value
Managers apply the concepts of interest, future value, and present value in making business decisions.
Therefore, accountants need to understand these concepts to properly record certain business transactions.