Question: Why do some companies issue bonds rather than borrow money
Why do some companies issue bonds rather than borrow money directly from a bank?
Answer to relevant QuestionsContrast the following types of bonds:a. Secured and unsecured. b. Term and serial. c. Callable and convertible. If bonds with a carrying value of $280,000 are retired early at a cost of $330,000, is a gain or loss recorded by the issuer retiring the bonds? How does the issuer record the retirement?Pretzelmania, Inc., issues 7%, 10-year bonds with a face amount of $70,000 for $70,000 on January 1, 2015. The market interest rate for bonds of similar risk and maturity is 7%. Interest is paid semiannually on June 30 and ...Discount Pizza retires its 7% bonds for $68,000 before their scheduled maturity. At the time, the bonds have a carrying value of $64,168. Record the early retirement of the bonds.On January 1, 2015, Splash City issues $500,000 of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year.Required: Assuming the market interest rate on the issue date is 10%, the ...
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