a. Sources that might a corporation obtain funds through long term debt are Bonds, Long term notes, mortgages and lease A bond arises from a contract 1) a sum of money at a designated maturity date 2) periodic interest at a specified rate on the maturity amount. b. A zero-interest bond is another name of zero coupon bond, it is a bond where the face value is repaid at the time of maturity and it is issued at discount. It must be presented as Bonds payable in long term debts in the liabilities column of balance sheet of financial statements. It is a way to raise capital without a) diluting the equity ownership of the company and b) not imposing an ongoing drain on cash flow in the form of ongoing interest payments. That said, though, zero coupon issuers will often establish a sinking fund toward meeting the future obligation. Solution a. Sources that might a corporation obtain funds through long term debt are Bonds, Long term notes, mortgages and lease A bond arises from a contract 1) a sum of money at a designated maturity date 2) periodic interest at a specified rate on the maturity amount. b. A zero-interest bond is another name of zero coupon bond, it is a bond where the face value is repaid at the time of maturity and it is issued at discount. It must be presented as Bonds payable in long term debts in the liabilities column of balance sheet of financial statements. It is a way to raise capital without a) diluting the equity ownership of the company and b) not imposing an ongoing drain on cash flow in the form of ongoing interest payments. That said, though, zero coupon issuers will often establish a sinking fund toward meeting the future obligation..

1. a. Sources that might a corporation obtain funds through long term debt are Bonds, Long term
notes, mortgages and lease
A bond arises from a contract
1) a sum of money at a designated maturity date
2) periodic interest at a specified rate on the maturity amount.
b. A zero-interest bond is another name of zero coupon bond, it is a bond where the face value is
repaid at the time of maturity and it is issued at discount.
It must be presented as Bonds payable in long term debts in the liabilities column of balance
sheet of financial statements.
It is a way to raise capital without a) diluting the equity ownership of the company and b) not
imposing an ongoing drain on cash flow in the form of ongoing interest payments. That said,
though, zero coupon issuers will often establish a sinking fund toward meeting the future
obligation.
Solution
a. Sources that might a corporation obtain funds through long term debt are Bonds, Long term
notes, mortgages and lease
A bond arises from a contract
1) a sum of money at a designated maturity date
2) periodic interest at a specified rate on the maturity amount.
b. A zero-interest bond is another name of zero coupon bond, it is a bond where the face value is
repaid at the time of maturity and it is issued at discount.
It must be presented as Bonds payable in long term debts in the liabilities column of balance
sheet of financial statements.
It is a way to raise capital without a) diluting the equity ownership of the company and b) not
imposing an ongoing drain on cash flow in the form of ongoing interest payments. That said,
though, zero coupon issuers will often establish a sinking fund toward meeting the future
obligation.