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Excess of a bond's maturity value over its issue price. Also called a "discount (on a bond)."
Bonds that may be converted into the common stock of the issuing company at the option of the investor.
Amount of the principle that is payable w/in 1 yr. Also called "current portion of notes payable."
Current portion of Notes Payable
Amount of the principle that is payable w/in 1 yr. Also called "current maturity."
Discount (on a bond)
Excess of a bond's maturity value over its issue price. Also called a "bond discount."
Effective Interest Method
Method of amortizing bond premium or discount that uses the present-value concepts covered in appendix A.
Effective Interest Rate
Interest rate that investors demand in order to loan their money. Also called the "Mkt interest rate."
Federal Insurance Contributions Act (FICA) Tax
Tax that is withheld from employees' pay & matched by the employer. Also called "S.S. tax."
Total amount of salary, wages, commisions, or any other employee compensation before taxes & other deductions.
Earning more income on borrowed money than the related interest expense, thereby increasing the earnings for the owners of the biz.
Market Interest Rate
Interest rate that investors demand in order to loan their money. Also called the "effective interest rate."
Borrower's promise to transfer the legal title to certain assets to the lender if the debt is not paid on schedule.
Net (Take-Home) Pay
Gross pay minus all deductions. The amount of compensation that the employee actually takes home.
The amount a borrower must pay back to the bondholders on the maturity date. Alson called principle amount or maturity value
Bonds that give bondholders the right to take specified assets to the issuer if the issuer fails to pay principal or interest.
S.S. (FICA) Tax
Federal Insurance Contributions Act, which is withheld from employees' pay & matched by the employer. Also called "FICA tax."
Stated Interest Rate
Interest rate that determines the amount of cash interest the borrower pays & the investor recieves each yr.
Unemployment Compensation Tax
Payroll tax paid by employers to the gov't, which uses the money to pay unemployment benefits to ppl who are out of work.
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