Bond Terminology 

Bonds are typically heavily tested on the FAR section of the CPA Exam. So, in the 11.01 - Bond Terminology video, Roger Philipp, CPA, CGMA, begins to lay the groundwork for understanding bonds by providing definitions of some key terms and concepts. It’s important to demystify and understand all the terms that may show up about bonds on the CPA Exam.
Some bond questions that Roger answers in the video are, "Why are some bonds issued at a premium? Are bonds debt or equity? Why are some bonds issued at a discount? How does the relationship between the bond yield and the bond coupon rate affect whether the bond is issued at a discount or premium?"
It's important to remember that market rate is the same as yield is the same as effective rate, and that the stated rate is the same as coupon rate is the same as face rate is the same as nominal rate. Also, carrying value equals book value equals reported amount. The basic formula for carrying amount is face value plus or minus
unamortized bond discount or bond premium. Don't understand term bonds, serial bonds, debenture bonds? No to worry, Roger explains it all in the video. By the end of this lesson, you will be ready to go into some numbers-heavy Bond Issuance Examples.
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Video Transcript Sneak Peek:
Welcome, welcome. Today we're going to talk about bonds and present value techniques because it's important to understand the concept of present value.
A bond is a very important area, very heavily tested and there's a whole bunch of different new ones, is a big word for me that relates to bonds. What is a bond? A bond is a borrowing agreement whereby the issuer of the bond promises to pay you, the purchaser of the bond, a certain amount of money after a certain period of time at a certain interest rate. That is what the purchaser of the bond or the issuer rather of the bond is promising to give to the purchaser.