Consider a Firm That Recently Issued Bonds

question 125

Essay

Consider a firm that recently issued bonds.Further, consider that the firm also set up a bond sinking fund.
Required:
a. Why would a firm create a long-term liability?
b. Why would a firm set up a bond sinking fund?
c. If a firm paid $10,000 into its bond sinking fund at the end of the year, how would this transaction be journalized?

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Definitions:

SDO Individuals

Individuals high in Social Dominance Orientation, a personality trait characterized by a preference for inequality among social groups.

Relative Gain

The concept in international relations that states measure their gains in comparison to those of other states.

Socially Condemned

Actions or behaviors that are widely disapproved or denounced by society due to violating shared norms, morals, or ethics.

Warfare

Armed conflict between parties, such as nations or groups, characterized by the use of military force to achieve political or social objectives.