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Wiley GAAP 2008 by Colorado Steven M. Bragg Englewood, Ralph Nach American Express Tax and Business Inc., Barry J. Epstein

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Definitions of Terms

AmortizationThe process of allocating an amount to expense over the periods benefited.
BondA written agreement whereby a borrower agrees to pay a sum of money at a designated future date plus periodic interest payments at the stated rate.
Bond issue costsCosts related to issuing a bond (i.e., legal, accounting, underwriting fees, printing, and registration costs).
Book value approachRecording the stock issued from a bond conversion at the carrying value of the bonds converted.
Callable bondA bond in which the issuer reserves the right to call and retire the bond prior to its maturity.
Carrying valueThe face amount of a debt issue increased or decreased by the applicable unamortized premium or discount plus unamortized issue costs.
CollateralAsset(s) pledged to settle the obligation to repay a loan.
Contingently convertibleConvertible securities where either the exercisability of the conversion feature or the conversion price are dependent upon the occurrence or nonoccur‐rence of some defined event (e.g., an IPO or change in control).
Convertible debtDebt that may be converted into common or preferred stock at the holder's option after specific criteria are met.
CovenantA clause in a debt contract written for the protection of the lender that outlines the rights and actions of the parties involved when certain conditions occur (e.g., when the debtor's current ratio declines beyond a specified level).
DebentureLong‐term debt not secured by collateral.
DiscountCreated when ...

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